a.       Three junior portfolio managers Andrew, Betty, and Cornell are arguing on the scenario when they should stop monitoring the portfolio performance. Andrew states that it is when the portfolio is totally aligned with the strategic objectives and goals. Betty claims that it is when the portfolio reached its stated objectives. Cornell disagrees with the two ideas and argues that monitoring portfolio performance is an ongoing activity. Whose opinion is correct? Explain your answer.

b.       AIA, an insurance company, has just appointed Mark as a new portfolio manager. Mark starts to review the current existing portfolio and assure the alignment of the portfolio components to the AIA strategic objectives and goals. Note that the ROI (return on investment) is calculated as ROI= Net Profit/Total Investment all the calculation disregards the time value of the money factor. Assume the following:

The weight of strategic alignment is 3.

The weight of ROI is 4

The weight of Risk is 2.

(i)                  Given the following scoring table, calculate the total score of priority of each component. (6 marks)

(ii)                 What is the priority order of the portfolio components? (2 marks)

	Criteria
	Strategic Alignment	ROI	Risk
	Value	Value	Value
Component 1	3	50%	2
Component 2	2	90%	1
Component 3	2	25%	3
Component 4	1	45%	4

 

Answer rating: 100% (QA)

A The opinion of Cornell is right because the fact is that management of Portfolio is indeed an ongo... View the full answer