You are provided with the following 3 portfolios:

Asset Class

Investment Portfolio 1

Investment Portfolio 2

Investment Portfolio 3

Cash

60%

5%

5%

Fixed Interest

25%

30%

0%

Shares

15%

35%

75%

Property

0%

30%

20%

Total

100%

100%

100%

When deciding on what is an appropriate asset allocation, investors often consider the following:

ability to deal with short term volatility

liquidity

concern about effects of inflation

potential tax effectiveness

capital growth

capital stability

1.Which of the six investor considerations listed above do you believe would be very important for an investor who chooses to invest in Investment Portfolio 1?

2.Which of the six investor considerations listed above do you believe would be very important for an investor who chooses to invest in Investment Portfolio 2?

3.Which of the six investor considerations listed above do you believe would be very important for an investor who chooses to invest in Investment Portfolio 3?