investment consultant , Financial Management

Suppose, you are working as an investment consultant in a consultancy firm and most of your clients are habitual investors, who are maintaining their own portfolios comprising of various combinations of stocks and bonds.

Mr. Zahid, a habitual investor comes to you for consulting about adding one more potential investing option to his existing portfolio. Currently, as per your analysis, there are two bonds available in the market with the following data:

Bond A Bond B
Maturity 3 years 8 years
Coupon payment 10% Annual 10% Semiannual
Yield 6.23% 9.8%

*Note: Interest rate fluctuations are high in the market

Required:
• Suggest Mr. Zahid, who is interested to add only one bond to his portfolio about the suitable bond for his portfolio.
• Support your choice by elaborating the reason on which the suggested bond is considered as a preferred option.

Posted Date: 11/27/2012 11:45:40 AM | Location : Pakistan







Related Discussions:- investment consultant , Assignment Help, Ask Question on investment consultant , Get Answer, Expert's Help, investment consultant Discussions

Write discussion on investment consultant
Your posts are moderated
Related Questions
PEST analysis and its derivatives Such  a  process  is  required for  an  organisation  to  be  continually  aware  of  external  factors within  its  general  or  industry  en

Q. Describes the methods of Capital Budgeting? Capital Budgeting: - Capital Budgeting is the procedure of making decisions for investment in long-term assets. It is a method of

Restrictions on Investments: A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer, which are rated not below investment

What is the matching principle of working capital financing?  What are the benefits of following this principle? The matching principle is while short-term financing is used fo

State the major decision of financial management The major decision of financial management is the decision relating to dividend policy. The dividend must be analysed in relat

Question: (a) Describe the Interest Rate Parity Theory. (b) A company needs to pay in 3 months USD 1 million. The USD are already at disposal in the company, thus the c

Country analysis and political risk Country analysis could use tools for example PEST factors in order to strategically analyse countries. Political risk

WHAT IF BALANCE DOES NOT EXIT

Historical Inflation and Stock Value Experience The experimental evidence denies the status of stocks as a good hedge against inflation. A study conducted by Ibbotson and Brins

Q. Changes in exchange rates? The law of one price proposed that identical goods selling in different countries should sell at the same price and that exchange rates relate the