illustrate your knowledge of portfolio construction, design a
illustrate your knowledge of portfolio construction, design a portfolio based on the following scenario:
Robert and Susan Jenkins have inherited $200,000. They are aggressive investors with a joint annual income of $100,000, no debt, and an additional $500,000 in assets other than the $200,000 inheritance.
Design 2 separate $200,000 portfolios based on the following scenarios:
The couple has 3 children between the ages of 9 and 17 years old, and they will use this money to pay for their college education.
The couple will use the money to help fund retirement in 35 years.
When designing your portfolios, be sure to keep the following in mind:
Each portfolio should contain at least 3 common stocks, 1 American Depositary Receipt (ADR) that you researched, and 3 bonds.
Leaving a portion of the portfolio in cash is an option if you feel that is it appropriate.
Charts and graphs should be used where appropriate.
Portfolio models should be based on the Jenkins’ demographic profile and time horizon.
Be sure to include the following in your discussion:
Reasons for your investment choices
Stock and bond investment risk and return factors
The security market line
Beta and standard deviation
Bond duration and interest rates
Part 3 Tasks
Generate a brief discussion of the following concepts: