Background

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

• 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?

• 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?

• 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?