CASE STUDY ON MR. X
Background information
Mr. X, who is in his mid-50s, is a senior manager with a mid-sized multi-national logistics and supply chain corporation based in Changi. He has a son aged 21 who has recently completed his national service enlistment and is preparing for a 3-year enrolment in a reputable Manchester City university in 6 months' time (estimated annual expenses including fees and lodging for a UK university education outside of London are about SGD 70,000-00 a year). Mrs. X, previously a full-time homemaker when their only child was younger, has just re-entered the labour market, working in the accounts department of a local import-export company.
Assignment
Based on your understanding of the investment tools and concepts that you have studied thus far, explain how you can use the same tools and concepts to advise Mr. X on allocating and utilising the investible funds of SGD 1.3 million.
Discuss your recommendation(s) (in 800 - 1,000 words) by considering with whom and how Mr. X should or should not invest the cash he has on hand.
Analyse the relative merits, demerits and risks involved and discuss the potential outcomes if Mr. X were to take up all your recommendations.
You can also give additional suggestion(s) and/or alternative(s) where appropriate (after giving due considerations to the various assumptions being outlined above) all of which must be duly supported by sound and detailed arguments.
Additional Guidance Notes For Students
1. In presenting your recommendation(s) to Mr. X, please remember to state the relevant steps involved in arriving at such a conclusion(s). This should include providing details of your analysis in determining Mr. X's various needs, requirements and objectives and how your recommendation(s) meet these criteria.
2. You should demonstrate your understanding of the investment concepts and tools learned (refer to your course Study Guide in case of doubts) in preparing your recommendation(s) with sound reasons and explanations. Consider the following in your write-up:
a. Have you conducted a thorough evaluation of Mr. X's financial health regarding his investment profile, stage of life cycle investing, liquidity needs, risk tolerance, etc. before deciding what his financial objectives should be?
(Please note that mere listing or repeating of Mr. X's circumstances as provided in the case is not the same as profiling. Profiling requires you to analyse and come to conclusions that fit his requirements regarding products, risk tolerance, time horizon for investing, objectives, liquidity needs, etc.)
b. Have you carried out a proper analysis of the proposals and considered the various risk factors or possible alterations in terms of asset allocation and diversification to meet Mr. X's needs as previously analysed by you under 2a above?
c. Have you prepared your recommendations based on your understanding and analysis and showed Mr. X the potential results or consequences of your suggestion(s)?
d. What would be the potential issues or problems faced when Mr. X actually accepts your recommendations? Are there any other mitigating factors or actions that Mr. X can take to reduce the uncertainties or risks if he were to fully accept your recommendations?
3. You can state additional assumptions which are reasonable and appropriate if these help you to further enhance and make sense of your advice to Mr. X.
(Any assumptions made which are not directly given in the case study itself should be relevant, reasonable and properly explained.)
4. Although not compulsory, you are very much encouraged to use graphs, charts and tables, etc. where appropriate to clearly illustrate the various points in your presentation. Bear in mind that such graphical representations not only save on the words you use but also can be an efficient and effective means of communicating your ideas to Mr. X provided that they are relevant, up to date and have clear explanations.
5. You must use proper referencing and citation formats where applicable.
Attachment:- Case on Mr. X.rar