What historic data is needed to obtain these parameter estimates? In the table below, obtain the composition of the active portfolio by completing the un-normalised, and normalised weights columns in the active portfolio. Normalised Share Alpha, a Specific risk, n Un-normalised weights weights AAA 5% 40% BBB 4% 30% CCC -3% 50% What is the implication of the negative alpha and what drawback does this provide n terms of the practical use of this model?

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Q: DIAGRAM 7 Expected return (%) Standard deviation of returns (%)

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Q: 2. What are the two types of fixed-income portfolio management strategies and why is each used?

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Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.