Coursework Assignment on Principles of Investment
Principles of Investment Individual Assignment
(LHWPC) Investment
This charity was set up by a very wealthy Victorian industrialist in 1896 who made a
fortune from lace-making and hosiery in the East Midlands area. It is dedicated to
giving charitable financial support to widows and orphans living within a specific
geographical area located around the City of Nottingham. It is run by a group of elected
trustees and has investments and cash approaching £4.5million.
The Trustees donate the Charity’s income to deserving cases who are invited to apply
following referral by social services and charitable organisations. These applications are
then assessed by a panel, and in qualifying cases, financial assistance is offered to help
with living costs, particularly in relation to education.

Principles of Investment
The Charity has approached you, as an independent financial advisor, to see if
you can advise and assist them going forward.
Specifically and in confidence, the Trustees have asked for their investment portfolio to
be reviewed and redesigned as they have concerns about its present structure. They
feel that it should be more balanced; less exposed to investment risks and are seeking
your advice in this respect.
In addition to the securities shown in the table, the Charity owned, until recently, a small
portfolio of commercial retail units. These have now been sold and the proceeds
(£960,000) are being held in a bank money market account, on one month’s notice of
withdrawal. This cash balance is also available for new investment.
As there is an adequate cash balance in the Charity’s current account to cover everyday
expenditure, you are reliably informed that there is no requirement for the Trustees to
retain any further money in cash as an “emergency reserve”.
The chairman of the Trustees has also mentioned that, following the appointment
of some new members, there has been some heated debate about the progress of
the funds under their control. He says that the following views have been
expressed at a recent meeting:
“The current investment prices and values are out of date by at least six months. Also
they look very unbalanced. Look at all those damned bank shares. We’ve lost a fortune
thanks to those bankers”.
“Financial advisors are just a bunch of rogues and charlatans and are only in it for the
commission they make by churning investments around. The one thing that they cannot
control is risk and, as a charity, security is clearly important to us.”
“The stock market is just a casino and is no place for a well respected charity such as
ours. You might as well stick all the money on the National Lottery”.

Principles of Investment
“Our share investments seem to be concentrated in similar companies and not very well
spread about. A friend of mine, who does a bit of investing in the stock market, tells me
this can potentially be very dangerous, and quite risky, if anything goes wrong.”
Details of the Charity’s investments are shown in the following table. The Chairman of
the Trustees apologises for the fact that the prices are a little out of date, they were last
valued about six months ago. So the first request, from the Chairman is for you to
calculate exactly what the total value of the investments is at the time of your
review. The Trustee’s chairman has also expressed the following concerns to
– the possible exposure to risk that is inherent in such a relatively large portfolio of
investments spread across various asset classes.
– the relatively high management fees which are payable for the Investment Trust
shares. They are not happy about this. Some of the new trustees have even proposed
that they should become more active in investment decisions themselves and not be
reliant on professional advice with all the associated costs.
– a more transparent investment policy whereby it is clear exactly what shares are in the
portfolio. The Investment Trusts appear to be very shadowy enterprises and the charity
has over £1.2m invested in them.
– to ensure their investments can be justified from an ethical point of view. The
chairman has indicated to you that this is a very important consideration from the
perspective of the Charity.
– to address their fears about the level of inflation in the future and how they could
mitigate any possible rises in the level of inflation. They have fears that both interest
rates and inflation may rise during 2019.
The chairman and the treasurer of the Trustees have requested that you review
the existing portfolio by updating the valuations and commenting on the range of
investments held, initially, in terms of asset allocation and risk. And then to
recommend, with reasons:
– how you would respond to the concerns of the Chairman, given above, and the views
of the five new Trustee members.
– the changes you would make to their current portfolio in terms of asset allocation and
diversification with your reasons in terms of investment theory and risk management.
– the construction of a new balanced investment portfolio for the Charity including your
recommendations for the investment of the additional £960,000 currently held in cash.

Principles of Investment
Therefore; in summary, you are to write a 3,000 word report which:
1) Updates the investment totals and reviews the suitability of the present
investment portfolio, with an analysis of the main risks.
2) Discuss briefly the theory behind portfolio planning and risk management.
You should also make reference to the relevance of the Trustee Act and the
responsibilities of Trustees in this type of situation. *See note below.

Principles of Investment
3) Make recommendations for appropriate changes to create a new
investment portfolio by applying relevant risk and return measures and
showing how they have been used to evaluate the assets.
The new portfolio should meet the needs of the Charity and should include
the investment of the additional cash holding. In creating the new portfolio
you should address the concerns expressed by the Trustees.
Please refer to the attached marking grid for guidance as to the structure and mark
weighting for the various learning outcomes.
* You should note that as a Charity, the LHWPC is governed by the Trustee Act
2000, and this should be taken into account in relation to any recommendations
that you make to the Trustees.
Nominal Stock Description Price Value
£200,000 5.00% Treasury 2018 £117.61 £235,220
£150,000 1.50% Treasury 2021 £106.21 £159,315
£250,000 5.00% Treasury 2025 £121.00 £302,500
£175,000 3.50% Treasury 2068 £168.58 £295,015
Sub Total for Gilts £ 992,050
Investment Trusts
Shares Price (p) Value
50,000 Alliance Trust 454 £227,000
70,000 Monks Investment Trust 380 £266,000
120,000 Fidelity China Special Situations 98 £117,600
Sub Total for Investment Trusts £610,600
Ordinary Shares Price (p) Value
25,000 Tesco 302 £75,500
32,000 Sainsbury 346 £110,720
22,100 Morrisons 201 £44,421
18,500 RBS 345 £63,825
36,400 Barclays 248 £90,272
28,000 HSBC 630 £176,400
35,000 Lloyds Bank 78 £27,300
2,500 BAT 3325 £83,125
10,000 Imperial Tobacco 3616 £361,600
10,000 Diageo 1914 £191,400
10,000 BAE Systems 424 £42,400
19,800 Meggitt 486 £96,228
9,750 A.B.Foods 3028 £295,230
350,000 Premier Foods 60 £210,000
Sub Total for Ordinary Shares: £1,868,421
Total Investment assets held (excluding cash) : £3,471,071
Total Investment assets held (including cash) : £4,431,071
Prices of the securities within the portfolio.
Choose a date on which you will do your research; use the date for updating asset
prices in the portfolio and the same date for selling / buying new assets as a result of
your recommended changes.
The Fund is prohibited from entering into any derivative transactions.
You are reminded that you must include a full reference section at the end of the
assignment and also include appropriate acknowledgements in the text of the
assignment. You should follow normal academic conventions e.g. the APA system.
Please obtain a leaflet on ‘Bibliography and Referencing’ from Adsetts to ensure you are
familiar with the methods of referencing.
The WORD LIMIT for the assignment 3,000 words (+10% max). The word count
(excluding bibliography and appendices) must be stated on the front sheet of the
assignment. If the word count is exceeded the rules shown below will apply.
If the word limit is exceeded. Your module learning scheme and assignment
specifications set a word limit of 3,000 words, excluding appendices. Where the
words exceed this by a 10% margin, work will be penalised for exceeding the word limit.
The penalty for exceeding the word limit is that 5 marks are deducted from the final tutor
mark. So, if your word count exceeds 3,300, the penalty will be 5 marks deducted.
Note: it is anticipated that the Appendix will contain items such as
tables / graphs / charts / articles etc. which support and help to
evidence your work.

Note: Large sections of “free text” in the appendix will be treated as
part of your main report and will be added to your word count.
The coursework deadline is 29th April 2019. Assignments should be
submitted through the portal on the Module Blackboard site and via
the turnitin link on the BB site.
Late submission of course work will be dealt with under standard University regulations which
are available on the Registry part of the Student Intranet. Marks and feedback will be available
via grade book.
Overview of the system and rationale for using it.
Turnitin is a text-matching online service that can be used to teach about, detect, and deter
plagiarism. Students and staff can submit work to the service through Blackboard sites.
Turnitin then generates an originality report based on how much text matches sources in
Turnitin’s database.
The Turnitin database consists of the following sources:
• Many websites (several billion)
•Principles of Investment

Online journals

• All previously submitted papers in the UK
A report is generated which highlights all matches and strength of matches to other sources.
Please note that Turnitin does not discriminate between properly referenced text and plagiarised
text. It just highlights text that staff (or students) should look at further and evaluate.
One main benefit of Turnitin is as a learning tool for students, because they can view the reports
themselves. Students can put their own work through the system and receive a report which can
help point out to them areas where they may have referenced improperly.
It is strongly recommended that students submit a draft of their assignment to the system prior to
the formal assignment hand-in deadline so they can see for themselves whether there is any
evidence of plagiarism.
Students must submit their final version of the assignment into the Turnitin system by the
published deadline date and time.
STUDENT NAME / NUMBER……………………………………………………………………
40 – 49% 50 – 59% 60 – 69% 70% and
Outcome 1
Evaluation of the
suitability of the current
portfolio with an analysis
of the main risks
Little attempt to
analyse the
suitability of the
existing portfolio
or to evaluate
Some attempt at
analysis of the
suitability of the
existing portfolio
and risk
attempt at analysis
of the suitability of
the existing
portfolio and risk
Good attempt at
analysis of the
suitability of the
existing portfolio and
risk evaluation.
An in depth analysis of
the of the suitability of
the existing portfolio
and risk evaluation.
Outcome 2
Analysis of the
theoretical background
to portfolio planning and
risk management and
appreciation of the
Trustee Act 2000 on the
investment strategy of
the Trust
Little or no
attempt at this
A basic
description of
theory and the
key points
description of
theory, the key
points and their
Good description of
theory, the key
points and their
A very clear
understanding of
theory and description
of the key points and
their implications
Outcome 3
Draw up a new portfolio
to meet the requirements
of the charity giving
suitable reasons for the
recommendations and
addressing the concerns
of the trustees.
Little or no
attempt at a
portfolio. No
reasons for
choice of
concerns not

Principles of Investment
An attempt at a
Reasons for
choice of
weak; some
attempt to
address trustees
attempt at a
balanced portfolio.
reasons for choice
of investments and
some trustees
Good attempt at a
balanced portfolio.
Good reasons for
choice of
investments and
trustees concerns
Work shows a very
good attempt at a
balanced portfolio.
Reasons for choice of
investments strongly
argued and backed
up; trustees concerns
Outcome 4
Usage and critique of
relevant literature,
accuracy and quality of
referencing in the text
and bibliography.
Written communication
and cogency of
Little or no
critical evaluation
of the set
Referencing and
bibliography very
weak or nonexistent.
Poorly written,
hard to follow,
spelling and
Some usage of
relevant literature,
but weak on the
critical evaluation.
Referencing poor
and inaccurate.
Able to follow
points made,
some spelling
and grammatical
Reasonable use of
relevant literature,
showing reading
around the
subject, but some
weaknesses in
Referencing good.
Reader friendly
and few spelling
and grammatical
Good review of
available literature
with good evidence
of reading around the
subject. Critical
evaluation of
literature good.
Referencing and
bibliography very
Very reader friendly,
few or no spelling
and grammatical
Work shows strong
evidence of depth of
reading and in depth
critical analysis.
Referencing and
bibliography excellent.
Very reader friendly,
few or no spelling and
grammatical errors,
imaginative /
innovative approach to
communication ,
Cheating regulations
Cheating happens when a student tries to obtain, or obtains, an unfair advantage. The University will not
condone any act of cheating because the act undermines the mutual trust which is essential in an
academic community. The procedures below define different forms of cheating and explain the processes
that the University will follow if cheating is suspected.
In addition to these procedures students on professional courses may also be subject to Professional
Statutory Body regulations and procedures, these procedures will be specified in individual course
Principles Underpinning Actions Against Cheating
• The University wants everyone to value the quality and standards of its awards; this is undermined by
• Plagiarism and collusion are forms of cheating or ‘academic misconduct’ and all cases will be dealt with
as such
• Regulations and procedures for dealing with cheating should be as fair, transparent and consistent as
• If plagiarism, collusion or other forms of cheating are alleged there must be sufficient evidence to
substantiate the allegations on a balance of probability
• Investigating and dealing with plagiarism and collusion mainly involves academic judgements
• The University reserves the right to use any reasonable and fair means of identifying plagiarism and
• The investigation and consideration of all forms of cheating, and the consequences arising, should not
be considered within the Assessment Board structure but by a separate panel
• Decisions made under the University’s School Academic Conduct Panel procedure may not be changed
by Assessment Boards
• Information should be recorded to facilitate monitoring and review of the procedures
• The length of time information is kept on individual student files should be determined by the severity of
the cheating.
Different Forms of Cheating
1 The following gives examples of some forms of cheating:
Plagiarism: this is where someone tries to pass off another’s work, thoughts or ideas as their own,
whether deliberately or unintentionally, without appropriate acknowledgement. Plagiarism can take a
number of forms, including:
complete plagiarism: the substantial and unauthorised use of the work or ideas of another person
without acknowledgement of the source, including copying the work of another student, eg writing,
computer programmes, designs, experiment results, music or copying of text directly from a website
without acknowledgement.
partial plagiarism: the inclusion of several sentences or more from another person’s work which has not
been referenced in accordance with SHU conventions on academic referencing and citation; the
summarising of another person’s work by simply changing a few words or altering the order of
presentation, without acknowledgement. This may be intentional with the aim being to deceive the
marker, and unintentional as a result, for example, of poor study skills.
self plagiarism or duplication: copying work that was originally completed and submitted by the student
and resubmitted for another purpose, without acknowledgement of this, unless resubmission is allowed.
collusion: this is where a student undertakes work with others, without acknowledgement, e.g.
• submits as entirely his/her own work, work done in collaboration with another person, with the intention
to gain an unfair advantage, or
• colludes with another student to complete work which is intended to be submitted as that other student’s
own unaided work or
• knowingly permits another student to copy all or part of his/her own work and to submit it as that
student’s own unaided work
If collusion is suspected and if after investigation it cannot be established which individual(s) is/are
responsible, all students involved will be deemed responsible, provided there is sufficient evidence to
substantiate the allegations on the balance of probability.
2 Falsifying data: this is where a student presents data in laboratory reports, projects, dissertations, etc
based on experimental/ experiential work which the student claims to have carried out but which he/she
has invented or obtained by unfair means.
3 Impersonation: this is the assumption by one person of the identity of another person with the intent to
deceive or to gain unfair advantage.
4 Dishonest practice: this covers any form of dishonest practice not specifically identified by the above
definitions, eg actual or attempted bribery, making false declarations to receive special consideration

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