Portfolio Management of Investors at Central Bank of Oman

This research proposal provides an overview on the portfolio management of investors at the Central Bank of Oman. It identifies whether portfolio management of investors at Central Bank of Oman helps investor to attain capital growth, consistent returns, security of the principal amount invested, diversify risk and obtain marketability of the securities they invests in.

Running head: RESEARCH PROPOSAL
RESEARCH PROPOSAL
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction......................................................................................................................................2
Introduction about the Central Bank of Oman................................................................................3
Background of research study.........................................................................................................4
Objectives of the research................................................................................................................4
Research questions...........................................................................................................................5
Scope of research.............................................................................................................................5
Research Hypothesis........................................................................................................................6
Research Methodology....................................................................................................................6
Types of research.............................................................................................................................6
Research Philosophy........................................................................................................................6
Sample characteristics.....................................................................................................................7
Sample size, features and scope.......................................................................................................8
Data collection methods..................................................................................................................9
Limitations of the research study.....................................................................................................9
Ethical issues of research...............................................................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction
The present research proposal provides an overview on the portfolio management of
investors at the Central Bank of Oman. Portfolio management refers to the procedure through
which the combination of assets is generally maintained for achieving stated objectives of
investment. It indicates the art of making proper decisions about the investment mix as well as
policy, allocation of assets for institutions or individual and also balancing risk against their
performance. Some of the vital elements of the portfolio management involve- asset allocation,
rebalancing and diversification (Brown 2012). Asset allocation mainly seeks in optimizing risk
and return profile of the investor by making investment in combination of the financial securities
that have les correlation with one another. Diversification is another vital element of investor’s
portfolio management that spreads risk as well as return within asset class. Rebalancing is
another element of portfolio management refers to the method integrated in returning portfolio to
actual target allocation at one year intervals.
When a particular investor decides to make investment in funds or stocks, then they
select the shares of the listed enterprises (Andritzky 2012). These investments generally have
various levels of return as well as risk. As there are various options of investment, the chances
become higher for these investors to gain success if proper strategy is applied for selecting
among these investments. Moreover, investors get better chance if they implement different
strategies such that each one might fit in particular economic situation. The investors also specify
which investment strategies are appropriate for the situation as well as investment goals (Kevin
2015). The portfolio management of investors is generally different from that of institutional
investor.

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Introduction about the Central Bank of Oman
The Central Bank of Oman is the country’s central bank that is mainly responsible for
maintaining as well as promoting financial as well as monetary stability in Sultanate of Oman. It
also fosters progressive financial system in the nation that is helpful to its economic growth. The
central Bank of Oman is the single regulator of financial as well as banking services sector in the
nation. This bank performs several functions as mandated by the Banking laws 1974, which are
given below-
 Formulates as well as manages monetary policy for achieving variety of target involving
stable price, employment and growth (Cbo.gov.om 2018).
 Regulates, licenses and supervises commercial banks, money exchange enterprises and
financial as well as leasing enterprises
 It act as banker to banks
 It acts as banker to this nation’s government
 It manages liquidity in this nation banking system
The Central Bank of Oman held the foreign exchange reserves, which is the financial
asset denominated in international currency. The main objectives of this bank in
administering foreign reserves are to stabilize the currency and support policy of exchange
rate. In fact, the FXRAP(foreign Exchange Reserve Assets Portfolio)is managed by the
investment officials and Treasury in Compliance with Investment Guidelines, Banking law,
Directives of RAMC(Reserve Asset Management Committee)and IC(Investment
Committee)aims to meet the following objectives-
 Preservation of capital

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 Maintenance of sufficient reserves as well as liquidity for ensuring sustainability of
currency.
 Optimal mix of risk and return
Moreover, a certain portion of FXRAP might be earmarked for the placement with more
than one fund manager with approval of Board of Governors.
Background of research study
For most of the central Banks involving Central Bank of Oman, portfolio of the assets is
mainly mobilized through external reserves management function as well as intervention (sale or
purchase of securities) in domestic financial market for controlling liquidity in the economy. The
portfolio managers of the Central Bank of Oman have been making an effort to adapt with this
approach in order to manage funds of their individual investors (Chandra 2017). The portfolio
managers of the Central Bank of Oman vary highly in terms of personality of investors.
However, the portfolio managers mainly focuses on the point that their investment purpose is to
gain higher return within risk budget constraint while fulfilling secondary needs that highlights
their investors personality. It has been evident from few studies that portfolio managers are also
implementing effective strategy for managing portfolio of investors at Central Bank of Oman.
Key terms used
The key terms used in this research study are portfolio strategy, optimization of risk and return,
asset allocation, rebalancing and diversification.
Objectives of the research
The main objectives of the research are-

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 To identify whether portfolio management of investors at Central Bank of Oman helps
investor to attain capital growth
 To recognize whether portfolio management of investors facilitates them to give
consistent returns
 To see whether this helps the investors to provide security of the principal amount
invested
 To identify whether it provides the investors opportunity to diversify risk
 To examine whether the investors obtain marketability of the securities they invests in
Research questions
The research questions for this specific research study are given as under-
 What is the significance of portfolio management of investors at Central Bank of Oman?
 What are the strategies used for portfolio management of investors at Central Bank of
Oman?
 Whether the investor’s portfolio management procedure is effective at the Central Bank
of Oman?
Scope of research
This particular research project provides huge scope to the investors to know whether the
whole procedure at the Central Bank of Oman can help them to gain consistent returns from their
investment (Ekeland, Mbodji and Pirvu 2012). In addition to this, this research study will also
aid the portfolio managers to understand their lack in the management procedure and improve it

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accordingly. This study will also help the investors to have an overview of the investment
portfolio at the Central Bank of Oman.
Research Hypothesis
The research hypothesis for this study will be-
H0: The portfolio management of investors at central Bank of Oman helps the investors to
reduce their risk in investment.
H1:The portfolio management of investors at Central Bank of Oman do not help the investors to
reduce their risk in investment.
Research Methodology
Types of research
In this research study, the researcher will conduct quantitative research in order to gain
knowledge about the research topic that aligns with the portfolio management of investors at the
Central Bank of Oman. The researcher will be using different methods as well as tools for
conducting this specific research. These methods will involve – research philosophy, method of
data collection and sampling design or technique (Cooper, Schindler and Sun 2006). This section
will also provide an overview on the sampling size, limitations and ethical issues of the research.
Research Philosophy
Research philosophy usually assists in categorizing the principle of research by using
different aspect of research study. Research philosophy is generally of four types such as-

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pragmatism, realism, interpretivism and realism. Positivism signifies collection of data that is
usually attained through observations. This philosophy involves the present theories that aids in
developing hypothesis testing during the research study. Moreover, it also utilizes the facts for
validating the data.
Realism philosophy mainly depends upon those ideas which not dependent on reality. In
addition to this, few facet of reality is mainly independent of beliefs as well as perceptions.
Pragmatism philosophy refers to the approach which facilitates in assessing the theories
that is utilized in research study in terms of practical application.
Interpretivsim philosophy refers to the type of approach which usually combats with
positivism philosophy. This kind of philosophy is associated with idealism and is adopted by
using qualitative research. Moreover, in this philosophy the researcher assesses elements as well
as combines individual interest (Panneerselvam 2014).
In this particular research paper, positivism research philosophy will be used for
analyzing the significance of portfolio management of investors at the Central Bank of Oman.
This philosophy will be applied in this research study as it uses the facts to validate the data.
Sample characteristics
Sampling Design indicates the sampling technique which involves few components of
total population in a sample. Several methods are applied for doing sampling design such as-
cluster sampling, simple random sampling, stratified sampling and so on. Sampling design is
mainly applied to select the subsection of elements from target population for gathering accurate

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information about the research study. Moreover, the information collected also helps to know
about the total population.
For this research study, simple random sampling will be used as the samples are to be selected
from huge population, thereby all investors will be provided equal opportunity to be chosen.
Apart from this, it will also help the researcher to gather information from the investors in easier
way.
Sample size, features and scope
Sample size mainly determines act of choosing the respondents in order to include in
statistical sample. This is one of the vital attributes in research study as it aids the researcher to
draw conclusion about the target population (Flick 2015). There are different methods that are
applied for selecting sample size such as- experience, confidence level, target variance and so on.
For this research study, sample size of 50 investors will be taken from the huge population in
order to gather accurate outcome of the research study.
Sampling technique is classified into two types, which includes- probability and non-
probability sampling. Probability sampling includes random unit selection from huge population
where each unit has equal chance of getting chosen. On the other hand, non- probability
sampling indicates non- random procedure of unit selection from total population. In this
research study, probability sampling technique will be used to attain precise results for
completing this project.

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Data collection methods
The information which the researcher gathers to disclose legitimacy of research mainly
relies on collection of correct data. Data gathering method is of two types- primary and
secondary. Primary data is gathered from observations and surveys whereas secondary data is
gathered from website, newspapers, journals and so on. Moreover, secondary data has been
considered as unreliable in comparison with primary data since secondary data can be inadequate
at times. Primary data can be categorized into- quantitative and qualitative. Quantitative data are
assessed by using statistical inferences (Neuman 2015). Quantitative data collection needs
various processes including surveys, experiments. On the other hand, qualitative data are
categorized based on characteristics and properties. Moreover, these types of data are gathered
from observations, interviews.
In this research study, primary data will be used to conduct the research study that aligns
with portfolio management of investors in the Central Bank of Oman. The primary data will be
collected by utilizing survey questionnaire. A questionnaire will be prepared and given to 50
investors in order to attain genuine outcome. Moreover, quantitative data has been used over the
qualitative data since the response gathered from the investors will be noteworthy(DeFusco et al.
2015).
Limitations of the research study
There are few limitations of this research study, which are given below-
 It will take longer time period for conducting this research study
 There might be ambiguity in the nature of investors while taking responses

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 This research can be difficult if the investors do not disclose the facts due to fear of
privacy
Ethical issues of research
Every researcher should abide by rules or principles of research. Ethical issues must be
taken into account while conducting the research study. For this research, the researcher will
maintain confidentiality of information since it might reveal the investor’s name who wants to
stay unidentified. Moreover, the researcher will take the investors consent during the survey
questionnaire process. In fact, the emotions of the investors will also be considered while doing
this research.
Conclusion
From the above discussion, it can be concluded that now- a- days portfolio management
of investors helps the investors to minimize the risk and attain consistent returns from their
investment. Moreover, the portfolio managers face huge difficulties in managing their investor’s
portfolio. Thus, proper implementation of portfolio strategy aids the manager to administer the
portfolio of investors in better way.

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References
Andritzky, M.J.R., 2012. Government bonds and their investors: What are the facts and do they
matter? (No. 12-158). International Monetary Fund.
Brown, R., 2012. Analysis of investments & management of portfolios.
Cbo.gov.om. (2018). Central Bank of Oman - Reserve Management. [online] Available at:
https://cbo.gov.om/Pages/ReserveManagement.aspx [Accessed 24 May 2018].
Chandra, P., 2017. Investment analysis and portfolio management. McGraw-Hill Education.
Cooper, D.R., Schindler, P.S. and Sun, J., 2006. Business research methods (Vol. 9). New York:
McGraw-Hill Irwin.
DeFusco, R.A., McLeavey, D.W., Pinto, J.E., Anson, M.J. and Runkle, D.E., 2015. Quantitative
investment analysis. John Wiley & Sons.
Ekeland, I., Mbodji, O. and Pirvu, T.A., 2012. Time-consistent portfolio management. SIAM
Journal on Financial Mathematics, 3(1), pp.1-32.
Flick, U., 2015. Introducing research methodology: A beginner's guide to doing a research
project. Sage.
Kevin, S., 2015. Security analysis and portfolio management. PHI Learning Pvt. Ltd..
Nardi, P.M., 2018. Doing survey research: A guide to quantitative methods. Routledge.
Neuman, W.L., 2013. Social research methods: Qualitative and quantitative approaches.
Pearson education.

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Panneerselvam, R., 2014. Research methodology. PHI Learning Pvt. Ltd..