Case_Cb_Plc

Dear, Please find enclosed the replies to your queries. After discussing with my group I have realised there are few more important changes to be done and it has to be done fast.  1. Answer to the part one requires inclusion of MV (mean variance) model in the portfolio explanation. A little bit of theoy and how deviated the current model is from the MV model is worth mentioning. (Very important to include as mentioned by my professor)    REPLY - As you might be knowing that building a MV model portfolio is a very tricky task which involves a greater level of information and statistics, which is absent from your given info. The theory part can be easily incorporated in the answer. But the main problem facing the practical model is the lack of info from your side like previous year returns, probability of thos returns happening again, Previous year asset classes, single asset risk classes etc. Also i don't think the assignment mentioned anywhere that we have to build a MV model. It just stated comment on the present structure , which in my view has been adequately addressed. 2. In scenarios part; I can see the answer given to me is a general explanation for any company holding that portfolio rather than a specific to this company, i.e., the company deals with copper, so any consequences or changes happening should be mentioned in terms of Copper. REPLY - If you look more deeply, i've addressed your problem beforehand only. Look in the answers for words like housing recession impact on pipes demand, Credit default, cash requirements in US due to supplier base etc. I don't think any more info is required.  Also being an established fund manager in my organisation, I think these are the practical issues which we look for while analysing any situation. Copper industry being highly price sesitive,depends a lot on the RM prices. This issue has also been addressed if you look carefully. I have done what they call "walk through" analysis of the situation . From the supplier to the customer every aspect has been covered . So you can relax on that front. 3. Could you please also mention a date here for the explanation of part 1 scenario B (It asks specifically to mention in the question given to you). REPLY- OK... ( In The PART B Starting Insert The date of 24 June 2011 as newspaper report refernece date) 4.  Also in the case study it is clearly mentioned the cash in each case should not fall below 5% (last page of case study). So, can you please make the necessary changes. REPLY- OK i misunderstood the language. Will be done.Allot 5 % in each cash reserve In the tyables of suggestions I have attached few comments I made as a note while I was given the feedback. It might be helpful for you to go through it and get some help. These feedbacks were given to me to make the answers more question specific than making it more general. I hope you understand my question. Please let me know if you need to know something. I have time till 2nd July evening. • Copper markets have reached their peak and prices are starting to stabilise..  REPLY- Still a margin for error must be taken as now a days the commodities have started trading on exchanges and you never know when the prices rise above the roof top. • The dollar is trading weaker against the sterling following poor US non-farm payrolls figures. REPLY- I've already discussed this aspect. • Private housing orders have fallen from last quarter but are much higher than a year ago REPLY- As on date of delivering assignment the housing numbers had not come. Further the world is still not out of the grip of recession. Thus it would be prudent in current situation to consider the worst case scenario and take action accordingly. A good fund manager always does so.