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AT&T, Inc. is a holding company, which engages in the provision of telecommunications media and technology service. It operates through the following segments: Communications, Warner Media, Latin America and Xandr. The Communications segment provides services to businesses and consumers located in the U.S., or in U.S. territories, and businesses globally. The Warner Media segment develops, produces and distributes feature films, television, gaming and other content over various physical and digital formats. The Latin America segment provides entertainment and wireless services outside of the U.S. The Xandar segment provides advertising services. The company was founded in 1983 and is headquartered in Dallas, TX. You are contemplating the idea of either investing in T or creating a portfolio which would include sub portfolios. One of the sub portfolios includes T and the S&P500. To that effect your client requested you to perform an analysis of potential risk and return of the publicly listed stock. AT&T Inc. (1) $39.04 Performance T-US S&P 500 70 60 50 $39.04 -0.52 (+1.35%) -0.10% 40 3.44% mu YTD Chg 3 Morth Cha 52 Week Cha 52 Week Beta 30 26.38% 0.74 520 abilitibbadwadhalibatailabilitatillerinde dalah dalam bahasa bakanten 14 "15 '16 17 (a) Based on the graph above, would you recommend having a portfolio with S&P500 and T, or only investing in T? Explain your answer. [2 marks] (b) How is defined contribution and defined benefits related to institutional investors in the field of portfolio management [2.5 marks] (c) Provide an analysis of the different steps involved in the portfolio management process and how asset allocation affects any of the steps you mentioned? [3 marks] (d) If you create a portfolio for your client with 38 percent invested in the S&P 500 U.S. stock index (which includes T) and the remaining 62 percent in the Vanguard Gold index. The expected return is 30 percent for the S&P 500 and 3 percent for the Vanguard Gold index. The risk is 7.5 percent for the S&P 500 and 5 percent for the Vanguard Gold index. Estimate the portfolio's return and risk given that the correlation coefficient between the S&P 500 and the Vanguard Gold index is -0.58? [3 marks] (e) Evaluate the effect of a change in the correlation coefficient to 0.9 on the portfolio's return and risk. [2 marks] (f) If you are interested in constructing a portfolio with 20% in the US energy sector and 80% in a U.S. metals & mining Index, which Exchange Traded Funds (ETF) could you use? [1 mark] AT&T, Inc. is a holding company, which engages in the provision of telecommunications media and technology service. It operates through the following segments: Communications, Warner Media, Latin America and Xandr. The Communications segment provides services to businesses and consumers located in the U.S., or in U.S. territories, and businesses globally. The Warner Media segment develops, produces and distributes feature films, television, gaming and other content over various physical and digital formats. The Latin America segment provides entertainment and wireless services outside of the U.S. The Xandar segment provides advertising services. The company was founded in 1983 and is headquartered in Dallas, TX. You are contemplating the idea of either investing in T or creating a portfolio which would include sub portfolios. One of the sub portfolios includes T and the S&P500. To that effect your client requested you to perform an analysis of potential risk and return of the publicly listed stock. AT&T Inc. (1) $39.04 Performance T-US S&P 500 70 60 50 $39.04 -0.52 (+1.35%) -0.10% 40 3.44% mu YTD Chg 3 Morth Cha 52 Week Cha 52 Week Beta 30 26.38% 0.74 520 abilitibbadwadhalibatailabilitatillerinde dalah dalam bahasa bakanten 14 "15 '16 17 (a) Based on the graph above, would you recommend having a portfolio with S&P500 and T, or only investing in T? Explain your answer. [2 marks] (b) How is defined contribution and defined benefits related to institutional investors in the field of portfolio management [2.5 marks] (c) Provide an analysis of the different steps involved in the portfolio management process and how asset allocation affects any of the steps you mentioned? [3 marks] (d) If you create a portfolio for your client with 38 percent invested in the S&P 500 U.S. stock index (which includes T) and the remaining 62 percent in the Vanguard Gold index. The expected return is 30 percent for the S&P 500 and 3 percent for the Vanguard Gold index. The risk is 7.5 percent for the S&P 500 and 5 percent for the Vanguard Gold index. Estimate the portfolio's return and risk given that the correlation coefficient between the S&P 500 and the Vanguard Gold index is -0.58? [3 marks] (e) Evaluate the effect of a change in the correlation coefficient to 0.9 on the portfolio's return and risk. [2 marks] (f) If you are interested in constructing a portfolio with 20% in the US energy sector and 80% in a U.S. metals & mining Index, which Exchange Traded Funds (ETF) could you use? [1 mark]

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