Case Cb Plc


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 ....