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You are approached by an entrepreneur couple who seeks advice on their self-managed superannuation fund (SMSF) with a balance of $2 million. They plan to

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You are approached by an entrepreneur couple who seeks advice on their self-managed superannuation fund (SMSF) with a balance of $2 million. They plan to retire in 10 years and intend to keep their SMSF running at least for another 25 years. The investment portfolio will invest predominantly in Australian Equity, World Equity, Unlisted Australian Property and Australian Fixed Income & Cash as requested by the clients. The portfolio performance is evaluated over 3 years (the review period) against a benchmark portfolio. In order to analyse the effect of differing asset allocations on portfolio risk and return, it is necessary to generate asset assumptions. In many cases, these assumptions are based on historical return data, which leads to choices about the data set and how it is used. You decide to adjust historical data based on expected returns following a particular method and use these adjusted returns as part of your bootstrap analysis to generate portfolio measures. Discuss the following issue in the context of your client's case, providing examples if it helps to explain your point: Identify and discuss three key considerations for deciding the appropriate data interval used in the quantitative analysis. Within your response, you are expected to explain the appropriateness of your choice of data interval for conducting the bootstrap analysis and how it is in line with the client's circumstances. (Note: you are required to not only identify three considerations, but also discuss how they might relate to each other, including any trade-offs involved.) You are approached by an entrepreneur couple who seeks advice on their self-managed superannuation fund (SMSF) with a balance of $2 million. They plan to retire in 10 years and intend to keep their SMSF running at least for another 25 years. The investment portfolio will invest predominantly in Australian Equity, World Equity, Unlisted Australian Property and Australian Fixed Income & Cash as requested by the clients. The portfolio performance is evaluated over 3 years (the review period) against a benchmark portfolio. In order to analyse the effect of differing asset allocations on portfolio risk and return, it is necessary to generate asset assumptions. In many cases, these assumptions are based on historical return data, which leads to choices about the data set and how it is used. You decide to adjust historical data based on expected returns following a particular method and use these adjusted returns as part of your bootstrap analysis to generate portfolio measures. Discuss the following issue in the context of your client's case, providing examples if it helps to explain your point: Identify and discuss three key considerations for deciding the appropriate data interval used in the quantitative analysis. Within your response, you are expected to explain the appropriateness of your choice of data interval for conducting the bootstrap analysis and how it is in line with the client's circumstances. (Note: you are required to not only identify three considerations, but also discuss how they might relate to each other, including any trade-offs involved.)

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