Section $2$: Asset Classes Discussion

$$ Based on Mr$.$ Tan's profile and risk preference, market conditions, and available

asset classes, recommend at least four suitable assets for his portfolio.

$$ Discuss the characteristics, risks, potential returns, and provide examples for each

asset class. You are encouraged to utilise diagrams, charts, tables and figures in the

discussion.

$$ Explain to Mr$.$ Tan regarding pros and cons of the right issue, assuming he owns

$1000$ Tesha shares and below scenario:

In $2023,$ Tesha, Inc. conducted a rights issue to raise additional capital for its growth

and expansion plans. Shareholders were given the opportunity to purchase additional

Tesha shares at a discounted price on a ratio of $1$:$5.$ Tesha's stock price before the

rights issue announcement was approximately $$800$ per share. The discount price is

$$500$ per share. Assuming Tesha has $1,000,000$ shares and all shareholders exercise

their rights.

$$ Section $3$: Funds Under Management

$$ Considering Mr$.$ Tan's preference for cost$-$effective index funds and his pursuit of

promising returns, provide an overview of funds in his portfolio.

$$ Evaluate the historical performance, risk, and return of these funds compared to

benchmark indexes.

$$ Address potential overconfidence bias in Mr$.$ Tan and propose a diversified fund

selection strategy.

$$ Introduce one or two new funds aligned with Mr$.$ Tan's needs and your expertise.

$$ Explain fund measurement by calculating the coefficient of variation and Sharpe ratio

using the provided data and provide an interpretation of calculations.

$$ Section $4$: Hedging Using Derivatives

$$ Discuss the potential use of derivatives $($e$.$g$.,$ options or futures$)$ to hedge Mr$.$ Tan's

portfolio against adverse market movements.

$$ Explain the benefits and risks associated with derivatives$-$based hedging strategies. $$ Assess the alignment of these strategies with Mr$.$ Tan's risk tolerance and overall

investment plan.

$$ Conclusions:

Summarize key takeaways from the report. Emphasise the importance of informed decision$-$making in achieving Mr$.$ Tan's investment objectives.