Essentials of Financial Management.

This assignment is worth 20% of the final mark

Essentials of Financial Management.

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This is a group-based assignment. You should form a group of 4 members from your seminar
group. Each group is required to upload a single report via your respective seminar group site
in Canvas. Please elect a group leader. The responsibility of the group leader is to upload the
report on behalf of the group.
It is important for each group member to contribute substantially to the final submitted work.
All group members are equally responsible for the entire submitted assignment. If you feel that
the work distribution is inequitable to either yourself or your group mates, please highlight this
to your instructor as soon as possible. Your instructor will then investigate and decide on any
action that needs to be taken. It is not necessary for all group members to be awarded the same
mark.
Note to Students:
You are to include the following particulars in your submission: Course Code, Title of the
GBA, SUSS PI No., Your Name, and Submission Date.
You must answer ALL the questions. (Total 100 marks)
Question 1
Go to the dollarDex website and under the tab “Tools” click on “Fund Finder”. Under “Fund
manager”, choose “UOBAM”. Then click on the “Advanced” tab and under “Payment
Currency”, select SGD.
Focus on the following four funds:
• Cash Management – UOBAM United SGD Money Market Fund – Class A1 SGD
• Equity – UOBAM United Asia Fund
• Bond – UOBAM United Asian Bond Fund
• Balanced – UOBAM Growth Path 2030

(a) For each fund, indicate the level (low, medium, high) for the risk and the return
characteristics and discuss your choice. Discuss the investment attractiveness of the
fund. Use the format below to answer your question:
Example:
(Type) Fund – (Fund Name)
(i) Risk: Low/Medium/High (choose one)
Reason: (explain using theory as well as data from the website)
(ii) Return: Low/Medium/High (choose one)
Reason: (explain using theory as well as data from the website)
(iii) Investment attractiveness
(discuss the type of economic condition for which this type of fund is most
suitable)
(48 marks)
(b) Discuss which fund would be most suitable for a relatively young graduate who has
been working for 3 years since graduation.
(12 marks)
Question 2
You are given the following information about Stock 1 and Stock 2.
The market risk premium is 8% and the risk-free rate is 4%.
(a) Use an appropriate tool to help you work out the following.
(i) Calculate the expected returns of Stock 1 and Stock 2.
(ii) Appraise which stock has the higher systematic risk.
(iii) Compute the total risk of each stock market.
(iv) Appraise which stock is riskier.
(30 marks)

(b) Discuss whether a risky asset can have a negative beta and what the CAPM predicts
about its return.
(10 marks)

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