Portfolio Management Quiz Solution

Portfolio Management Quiz Solution

Solution to Q1:
To start the investing journey for any financial goal one should first be clear about the goal i.e. amount required and time of investment. Then they should use the wealth formula to break down the goal in form of SIP. The goal has to be realistic at all times and should not be very high risk. Then one should be clear about which asset they have to invest into as per the risk involved in the asset class and then invest as per the SIP. 

Solution to Q2:
As a general rule of thumb, the more the return of the asset class, more is the risk involved in it. In the given set of assets, Arbitrage Funds or Liquid Funds are the assets which have the least risk. Then comes Debt Funds or Bonds. It is followed by Index (Index Investing as per Dow Theory). The most returns on a CAGR basis are achieved in stocks.

Solution to Q3:
In the first step of the calculation, the inflated amount of 10 Lakhs in the next 5 years is to be calculated. Taking inflation as 6% p.a. the amount comes to be Rs 13,38,225.58 using formula =FV(6%,5,0,-1000000).
In the second step, this inflated amount is to be converted into a SIP. Since the risk is moderate, the return for the asset would be 15%. Now the SIP comes to be Rs 15,108 p.m. using formula =PMT(15%/12,5*12,0,-1338225.58).
The risk profiles are as follows:
Low: 10-12%
Medium or Moderate: 15-20%
High: More than 20%

Solution of Q4 and 5 are in the attachment of the bottom of this webpage.

    • Related Articles

    • Portfolio Management FAQ

      -Don't panic seeing the portfolio management excel sheet firstly. Go through the videos of the Portfolio Management videos first and then try to simultaneously solve the excel sheet. -Here is the conceptual solution of question 6 of the Portfolio ...

    • Portfolio Review

      Please download the file in attachment and fill the Excel Sheet and send it back to us! GPE Sheet is for review of your investments and not trades! Goela Trading Journal is for review of trades and not investments! Make sure you enclose the link of ...

    • Bonus Modules Section

      Portfolio Management Section: Portfolio Management FAQ Money Management Blueprint: Money Management Blueprint FAQ

    • Money Management Blueprint FAQ

      - There is a discussion of managing money in 6 different accounts. This doesn't mean that you have to have 6 different bank accounts. All the discussed accounts can be put into one bank account. You need to have that separation or distribution of ...

    • Fundamental Analysis 101

      Sectoral Analysis: Starting Fundamental Research of Sectors Cashflow Analysis: Cash Flows Explained Portfolios 101: Portfolio Review and Management  GSS Sheet, Moats and Risk / Qualitative Analysis: GSS Sheet IPO 101: IPO psychology and ...