NISM Series XXI-B case set 1

A discretionary portfolio contains ₹70 lakh of equities, ₹20 lakh of bonds and ₹10 lakh of cash. The client’s agreed investment policy targets 60% equities, 30% bonds and 10% cash, measured on the whole portfolio. A known ₹8 lakh payment is due in six months, so the manager must retain the full current cash buffer for this exercise. The policy also limits any one equity issuer to 10% of total portfolio value. One issuer is currently worth ₹14 lakh. The manager will rebalance at the current values without taxes or trading costs, first correcting the issuer excess and then making any remaining equity reduction. All policy limits are client-specific assumptions, not statutory limits.

All amounts and contract terms in this case are hypothetical.