Length: 1 week
Type: Individual

In this assignment we help you in measuring your student's understanding of concepts taught in class, such as diversification, asset allocation according to different risk profiles, and risk management.

See the AI Grading Rubric for details on what we are tracking for you for this assignment.

Key Learning Objectives:

  1. Help you develop/improve your understanding of diversification across industry sector or geographic regions
  2. Help you develop/improve your sense of risk and return across equities and fixed income products

Create 3 portfolios for 3 different client profiles (1 low risk, 1 moderate, 1 aggressive). 

For each, decide:
A. How much to invest in equities and how much in fixed income, within the allowable

B. Within the realm of equities, decide how much to allocate between:

  • US, developed international, and emerging markets
  • Within the U.S., between value and growth stocks or funds
  • Within the U.S., between large cap and small cap

C. Within the realm of fixed income, decide how much to allocate between:

  • Short term vs. long term bonds
  • US Treasuries vs. investment grade corporates vs. high yield bonds

Briefly expand on your rationale for the asset allocation of each portfolio and comment on how the three differ.

Monitor each portfolio's performance and volatility throughout the week and compare their relative risk/reward in the context of the client profiles.

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