finances

Fin 550-Homework:

1-Peter and Andrea Mueller have built up their $600,000 investment portfolio over many years through regular purchases of mutual funds holding only U.S. securities. Each purchase was based on personal research but without consideration of their other holdings. They would now like advice on their total portfolio, which follows:

-Andrea’s company stock Stock Small-cap growth 1.40 35

-Blue-chip growth fund Stock Large-cap growth 1.20 20

-Super beta fund Stock Small-cap growth 1.60 10

-Conservative fund Stock Large-cap value 1.05 2

-Index fund Stock Large-cap index 1.00 3

-No dividend fund Stock Large-cap growth 1.25 25

-Long-term zero coupon fund Bond Government — 5

Evaluate the Mueller’s portfolio in terms of the following criteria:

a. Preference for “minimal volatility”

c. Asset allocation (including cash flow needs)