Assignment

Submit a power point presentation based on:

Your team members are part of an investment committee. Recently, you wrote a report that explained your recommendations for allocating a new $100,000,000.00 portfolio on behalf of a U.S. based foundation. Your team has the greatest knowledge about investing of any of the members on the committee. Fortunately, they respect your opinions and advice. A few questions have been raised that must be addressed with the other committee members before you can proceed to invest your portfolio.

1. Should the portfolio be invested actively, passively or using a mixture of the two? (As part of your answer, include definitions of active and passive and examples of each.)

2. Should the portfolio be constructed using academically rooted approaches like Mean-Variance Optimization or the CAPM? (As part of your answer, explain MVO and CAPM and their proposed benefits and actual limitations. How has the academic approach evolved?)

3. Should the portfolio be rebalanced? If so, what should be the rules for rebalancing? (As part of your answer, define rebalancing, explain the purpose(s) of rebalancing and differing views on when to rebalance.)

4. Should the portfolio be allocated/invested and managed strategically or tactically? (As part of your answer, describe behavioral finance and how it relates to this decision.)

Please write your team's report to the committee for each of the four questions above. The best answers will be logical, explain a clear understanding of the major concepts and be substantiated convincingly.

Please organize your presentation in exactly the order described above. Please covey your responses in a clear, complete, correct and concise manner. Bullet points and phrases are fine if your meaning is not ambiguous. I expect that presentations will be well organized and professional. Your presentation should not include more than 35 slides. Please do not crowd text on your slides. More information on each topic is not necessarily better. We will be grading most favorably assignment submissions that are clear, complete, correct, concise, well organized and professional quality.