Q2. (20%) Your Uncle Norman has passed away leaving your Aunt Joan with the following investment portfolio. By answering the questions below, can you give her advice on which 1 investments to keep, which she should sell and possibly increase her holding. For your information, the FTSE 250 Index has return of 15% and Bank of England bonds have a return of 2% P/E CODE NAME BETA ROE RATIO UKCM UK COMMERCIAL PROPERTY 0.82 11% 36.12 FOUR 41MPRINT GRP. 1.43 25% 10.00 888888 HLDGS 0.95 41.60% 8.41 ASL ABERFTH.SMLL.CO 1.58 -99% -3.12 AGK AGGREKO 0.73 9.25% 15.96 AAF AIRTEL AFRICA 1.33 6.73% 22.70 | AJ BELL 0.38 6.58 30.13 CRST Crest Nicholson 0.75 9.52% 15.58 RAT Rathbone 0.59 5.46% 44.00 ASCL ASCENTIAL 0.79 31.15 29.79 PLP Polypipe 0.54 15.22 21.96 Please answer the following questions: a. Using relevant information and theory, which shares do you think she should sell? (25 marks) b. Using relevant information and theory, which shares do you think she should keep or even increase in holding? (25 marks) C. Your late Uncle held all of these shares in roughly equal amounts. Was this a good idea and if not, what would you suggest? (25 marks) d. Given your understanding of relevant theory, what should happen to shares which are offering rates of return which are different from the market? (25 marks) Q2. (20%) Your Uncle Norman has passed away leaving your Aunt Joan with the following investment portfolio. By answering the questions below, can you give her advice on which 1 investments to keep, which she should sell and possibly increase her holding. For your information, the FTSE 250 Index has return of 15% and Bank of England bonds have a return of 2% P/E CODE NAME BETA ROE RATIO UKCM UK COMMERCIAL PROPERTY 0.82 11% 36.12 FOUR 41MPRINT GRP. 1.43 25% 10.00 888888 HLDGS 0.95 41.60% 8.41 ASL ABERFTH.SMLL.CO 1.58 -99% -3.12 AGK AGGREKO 0.73 9.25% 15.96 AAF AIRTEL AFRICA 1.33 6.73% 22.70 | AJ BELL 0.38 6.58 30.13 CRST Crest Nicholson 0.75 9.52% 15.58 RAT Rathbone 0.59 5.46% 44.00 ASCL ASCENTIAL 0.79 31.15 29.79 PLP Polypipe 0.54 15.22 21.96 Please answer the following questions: a. Using relevant information and theory, which shares do you think she should sell? (25 marks) b. Using relevant information and theory, which shares do you think she should keep or even increase in holding? (25 marks) C. Your late Uncle held all of these shares in roughly equal amounts. Was this a good idea and if not, what would you suggest? (25 marks) d. Given your understanding of relevant theory, what should happen to shares which are offering rates of return which are different from the market? (25 marks)
