TIMU JUULTU TU TILUL TIC SWA SCICOLTO superTI SATTIS. proposal deviates from past practice and a few committee members raise questions. Required: (a) Answer the below : (i) Will the constraints of 40 equities likely lead to higher or lower risk of the portfolio ? Explain. (2 marks) (i) Is there any method Ross can lower the no. of issues from 80 to 40 by not significantly influencing risk ? Explain. (2 marks) (b) One member of the committee demonstrate high interest with respect to Robert's proposal. He suggested that Ross's performance might benefit from reduction in the no. of issues to 20. If the reduction to 40 could be expected to be advantageous, explain why reduction to 20 could be less beneficial (Assume that Robert will evaluate the Ross portfolio in an independent manner). (4 marks) I (c) Another member of the committee suggested that rather than evaluate each managed portfolio independently of other portfolios, it's better to take into consideration of the changes in Ross portfolio on the aggregate fund. Explain how this view can influence the decision of the committee to restrict the holdings of Ross portfolio to either 20 or 40 issues. (4 marks) TIMU JUULTU TU TILUL TIC SWA SCICOLTO superTI SATTIS. proposal deviates from past practice and a few committee members raise questions. Required: (a) Answer the below : (i) Will the constraints of 40 equities likely lead to higher or lower risk of the portfolio ? Explain. (2 marks) (i) Is there any method Ross can lower the no. of issues from 80 to 40 by not significantly influencing risk ? Explain. (2 marks) (b) One member of the committee demonstrate high interest with respect to Robert's proposal. He suggested that Ross's performance might benefit from reduction in the no. of issues to 20. If the reduction to 40 could be expected to be advantageous, explain why reduction to 20 could be less beneficial (Assume that Robert will evaluate the Ross portfolio in an independent manner). (4 marks) I (c) Another member of the committee suggested that rather than evaluate each managed portfolio independently of other portfolios, it's better to take into consideration of the changes in Ross portfolio on the aggregate fund. Explain how this view can influence the decision of the committee to restrict the holdings of Ross portfolio to either 20 or 40 issues. (4 marks)