Section B: This section has two Questions Chose one question only

Question Three

a$)$ One of the initial steps in the investment process is to understand the Client risk perception and

investment choice.

Required

Explain how the Bailard, Biehl, and Kaiser $($BBK$)$ Psychological Needs Model can help the

portfolio managers to assess the Individual investors risk perception and investment choice $(15$

marks$)$

b$)$Mr Bwalya has retired at the age of $60$ years and has been given K$500,000$ as a retirement

package. He has started a apart time Job where he earns a small amount of income, he receives

monthly social security payments from NAPSA. He owns his own house and has a modest lifestyle. He

has approached your Mutual Fund Company where you work as an investment manager for advice on

how he should invest his K$500,000$ retirement package.

Required

Prepare an Investment Policy Statement; clearly stating any, assumptions that you will make $(15$