Portfolio 2

Kingdom of Saudi Arabia

Ministry of Education

Saudi Electronic University

المملكة العربية السعودية

وزارة التعليم

الجامعة السعودية الإلكترونية



                          College of Administrative and Financial Sciences

Assignment 2

Portfolio Management (FIN424)

Due Date:  26/03/2022 @ 23:59


Course Name: Portfolio Management Student’s Name:
Course Code: FIN424 Student’s ID Number:
Semester: Second  CRN:
Academic Year:2021-22-2nd


For Instructor’s Use only

Instructor’s Name:
Students’ Grade:

Marks Obtained/Out of 10

Level of Marks: High/Middle/Low


  • The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
  • Assignments submitted through email will not be accepted.
  • Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page.
  • Students must mention question number clearly in their answer.
  • Late submission will NOT be accepted.
  • Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions.
  • All answered must be typed using Times New Roman (size 12, double-spaced) No pictures containing text will be accepted and will be considered plagiarism).
  • Submissions without this cover page will NOT be accepted.


Learning Outcomes:

CLO 1-Recognize the characteristics and risks of stocks, bonds, money market, and property investments.

CLO 4- Analyse and choose appropriate Alternative Investments Portfolio Management.

CLO 5- Evaluate portfolio performance and risk.


 (Problem Solving & Critical Thinking Assignment Question(s) :


Q.1 (a).What is the relationship between Yield Curve and Fiscal and Monetary Policies ? (1.5 Marks)

Q.1 (b). Describe the relationship between Inflation and Business Cycle. (1.5 Marks)


Q.2.Explain about the different sources of excess return in international bond portfolios (3 Marks)


Q.3.Given the following information, calculate the short-term interest rate target. (2Marks)


Neutral rate                      4%

Inflation target                 3%

Expected inflation           7%

GDP long-term trend       2%

Expected GDP growth     0%


Q.4.Given the following information, calculate the Sharpe Ratio. (2 Marks)

Return of Portfolio          30

Risk-free Return              10

Standard –deviation of portfolio’s excess return  15