capital preservation and capital appreciation current income and total returnQuestion $1(20$ marks$)$

You are a portfolio manager for a leading financial institution. You have a client w

portfolio management, invested $$5,000,000$ in Honey Bun Company and $$3,000,00$

Investment Company. The client had some concerns about his investment portfolio.

expected return is $8\%$ and JMMB$\text{'}$s expected return is $10\mathrm{.}2\%.$ The client had a challenge $u$

the concept of a portfolio and sort answers to the following questions and information enqu

Required

a$)$ What are the steps in the portfolio management process? $(4$ marks$)$

b$)$ Describe the return objectives of Capital Preservation, Capital Appreciation,

Income and Total Return. $(2$ marks$)$

c$)$ Describe four investment constraints that an investor may face. $(2$ marks$)$

d$)$ Explain the three phases of an investor's life cycle. $(3$ marks$)$

e$)$ State the three basic assumptions behind Markowitz Portfolio theory. $(3$ mark

f$)$ Using indifference curves explain the relationship between risk and returns $($R

Aversion$).(4$ mark$)$

g$)$ What is the expected return of the portfolio? $(2$ mark$)$