This mini case is designed to emphasize both theoretical and analytical aspects of investment decisions and deals with modern investment theoretical concepts and instruments. It will help students to understand the investments field as it is currently understood and practiced for sound investment decisions making.

The case study is a group case. Each group should be of maximum 3 students.

Objectives:

• To describe and to analyze the investment environment, different types of investment vehicles;
• To understand and to explain the logic of investment process and the contents of its each stage;
• To analyze and to evaluate relevance of stocks, bonds, options for the investments;
• To understand the psychological issues in investment decision making.

Investor Profile

Name: Abdulla Ahmed

Age: 35

Job: Real Estate Contractor

Martial status: Married with 2 children

Monthly income: $ 5,500

Initial wealth to invest: $200 000

Liquidity needs: None

Preconditions: None

Investment Horizon: 8 to 10 years

Financial knowledge: Good knowledge and some investment experience

Investment market: US market

World Economic Conjuncture: Your own research

Market news: Collect market news

Based on the investor profile, prepare a proposal for portfolio management which should include the following points:

• Describe the investor profile
• What is your expectation about the investor's risk tolerance?
• What could be a possible primary/secondary portfolio objective and why?
• What will be the asset allocation: (e.g. common stock, bonds, preferred stock, cash, etc.). their weights within the portfolio). Discuss why are they consistent with the portfolio objective set?
• Which strategy the investor should follow in his portfolio investment.