Constructing and Managing a Portfolio � PAGE �6�
Constructing and Managing a Portfolio Simulation - Memo
Jamila Lewis
University of Phoenix
INVESTMENT FUNDAMENTALS AND PORTFOLIO MANAGEMENT, FIN 402
Instructor: STEVEN PETRIZZI April 12, 2010
Constructing and Managing a Portfolio Simulation - Memo
MEMORANDUM
To: Rainier Ekstrom, CEO
Casa Bonita
From: Jamila Lewis, Treasure Analyst
Casa Bonita
Re: Risk and Return Tradeoff
The method of portfolio construction can be multifaceted from beginning to end. Financial analysts comb through a large amount of statistics, including: industry knowledge, past performance, and future potential. Analysts also rely on personal expertise into the market to arrive at the final list (UNIVERSITY OF PHOENIX, 2010). Casa Bonita Ceramics was created by an artist named Juan Peres Fuentes. Juan was introduced to tile making by his family. Casa Bonita was a professionally run business that capitalized on its Spanish and Mexican heritage and customers (UNIVERSITY OF PHOENIX, 2010).
Casa Bonita is one of the largest tile manufacturers in the United States with annual revenues of $150 million (UNIVERSITY OF PHOENIX, 2010). Casa Bonita offers floor and wall tiles in glazed and unglazed ceramic, mosaic and porcelain, in addition to a wide range of quarry tiles (UNIVERSITY OF PHOENIX, 2010).
This memo will detail the choices I made in the Constructing and Managing a Portfolio Simulation. This simulation details the fundamentals of portfolio construction as it relates to the risk-return tradeoff and the relationship between investment strategy and investment performance (UNIVERSITY OF PHOENIX, 2010). In addition, this memo will discuss the Sharpe ratio and how it relates to investment decisions.
As the Treasury Analyst for Casa Bonita, my job included preparing investment reports and developing comprehensive cash flow statements, in addition to performing risk analysis, forecasting, and statistical evaluations. In 2004 Casa Bonita generated excess cash and decided...