PORTFOLIO RISK MANAGEMENT

PORTFOLIO RISK MANAGEMENT

QUESTION:

As your responsibility, your group expected to construct a capital gain portfolio with the budget of BND 100 billion. Your group asked to construct an optimal
portfolio based on your objectives. Your senior manager has recently suggested your group to invest in stocks of companies listed in New York Stock Exchange (NYSE).

Portfolio Risk Management Related:
Establishing and maintaining the fund’s good reputation is of paramount importance. To achieve this aim, as well as to attract co-financing on reasonable terms, a set
of portfolio limits is needed to be devised which will allow the fund to operate with prudent exposure parameters in line with international best banking guidelines.

The fund recognizes three types of limits. They are:
Total portfolio limit – limit imposed on the total portfolio
Geographic or sector based diversification limit – limit the geographic exposure concentration or sector based diversification and reduce risk to a specific location
or sector.
Portfolio diversification limit – limit of diversification on a specific investment or a specific sector.
TASK:

Introduction (2 pages)
-Overall idea about the assignment
-The aim of the assignment
-The Important facts of assignments (portfolio risk management)

Describe about our Portfolio according to the needs of investor
-Explanation about how our portfolio going to fulfill the needs of investor
(capital gain from portfolio investment) – (2 pages)
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