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BS 350-BF 320-BSP 320 Assignment 1 2024-2025 FT

The document outlines an assignment for a course on Investment Analysis and Portfolio Management at the Copperbelt University, detailing two main questions related to portfolio management strategies and performance analysis. It includes a comparison of active and passive portfolio management, along with a practical exercise involving the calculation of tracking errors for two managed portfolios over three years. Additionally, it provides a scenario involving a lottery winner and seeks advice on investment options for him and his family members.

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39 views3 pages

BS 350-BF 320-BSP 320 Assignment 1 2024-2025 FT

The document outlines an assignment for a course on Investment Analysis and Portfolio Management at the Copperbelt University, detailing two main questions related to portfolio management strategies and performance analysis. It includes a comparison of active and passive portfolio management, along with a practical exercise involving the calculation of tracking errors for two managed portfolios over three years. Additionally, it provides a scenario involving a lottery winner and seeks advice on investment options for him and his family members.

Uploaded by

peterchipulu117
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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THE COPPERBELT UNIVERSITY

SCHOOL OF BUSINESS

BS 350 / BF 320 / BSP 320 – Investment Analysis and


Portfolio Management

Assignments - Set 1
Due Date: 31 July 2025

Lecturer: Mr. C. Munyonzwe


Question 1

Portfolio management is concerned with making decisions about investment mix and policy,
matching investments to objectives, asset allocation for individuals and institutions, and
balancing risk against performance.

(i) Explain the difference between Active and Passive portfolio management.

(ii) Explain the two main strategies in passive portfolio management and comment on the
effectiveness of the strategies in achieving the desired outcome.

(i) Suppose two investors have formed portfolios, A and B, designed to track a particular
benchmark. Over a period of three years, the returns to the portfolios as well as the index
returns were as follows:

Managed portfolio A Managed portfolio B Benchmark


Year Quarter (%) (%) (%)
2022 1 3.9 4 4.2
2 -3.9 -4.9 -4.7
3 11 10.6 10
4 2.3 3.2 2.7
2023 1 1.1 0.8 0.2
2 3.5 3.7 4.8
3 9.9 9.1 9.3
4 -0.7 1.8 0.9
2024 1 8.2 7.9 6.2
2 4.2 4.7 8
3 4 2.8 7
4 0.2 0.4 5

Calculate the annualised tracking errors for the managed portfolios. Which portfolio
performed better over the period and why?

2
Question 2

(a) Mr Zabbwino Palibe, aged 68, has just won a jackpot on the Zambian Lotto
competition worth K1,800,000 (net of taxes). He has decided to share the money with his son
Vuto, aged 44, and his grandson Ganizo, aged 21, in equal amounts i.e. K600,000 each. They
are worried that they may misuse the money especially considering that it was not hard
earned and has just come as a wonderful surprise.

Using your knowledge of investment analysis and portfolio management, advise each of them
on the individual possible financial assets that they can invest in, supporting your advice
with the reasons why they should go for your suggested investments.

END

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