Question 2.4 (2 Marks)

(a) If you are not risk averse, identify at least one risk taking strategy that may help maximise your portfolio's return in the future.

(b) Identify at least one risk minimisation strategy that may improve the possibility that the portfolio's return will not be significantly different from the expected market return. How may this affect the portfolio's return in the future?

Question 2.5 (3 Marks)

Can you identify the company's dividend policy? Have they adopted a stable dividend, a constant dividend payout ratio, a residual dividend or some other dividend policy? Support your opinion with reference to the company's historical earnings and dividend payments. Dividend policy may not be easily recognisable and may change from time to time. Look for trends to support your conclusions.

Most companies have a shareholder's section on their web site. Historical earnings and dividend details may be included here. Alternatively, you can review the historical financial information for each company on investor research web sites (e.g. COMMSEC, Yahoo Finance and Bloombergs are examples of investor research web sites - but there are many others that you may prefer to use.). These details should provide sufficient trends for you to identify the company's dividend policy.