Please note that there is no video presentation requirement for this session. Only a PowerPoint document is required for the final report. Investment Portfolio Outline

You are a portfolio manager in an investment company (can be a mutual fund, or a pension fund, hedge fund, private equity firm, or any you may imagine). You have $1 million to invest for your fund.

Goal of the project: To Learn and Apply the basic tools and skills In Investment Analysis.

Assets Available for investment: Stocks or ETF's or any marketable investments you like.

Portfolio Goal: (Choose one), Capital Appreciation, Capital Preservation, Income, or any objective you may define.

Portfolio Selection Strategies: Risk and Reward Specification

Data recording and analysis:

Download one year weekly stock price data of your stocks

Calculate weekly portfolio returns and standard deviation

Performance Calculation and Analysis: calculate Sharpe ratio for your portfolio

Compare the portfolio Sharpe ratio with that of the market portfolio (Use the S&P500 portfolio as a proxy for the market portfolio)

Prepare your report in MS PowerPoint: You will prepare a report that includes: an Introduction of your portfolio and description of the stocks any major news that moves your stocks explanation of any theory you applied

the data sources, weekly and overall results

and your summary conclusion. Include everything in a PowerPoint document. To submit your report, login Blackboard, click Module 7, find the folder for "Project Submission." Your report will be assessed by the following Assessment Matrix:

Case explanation and Portfolio setup and your stock selection: 30%

How do you create your portfolio and how do you allocate your initial $1 million investments. Explain the risk tolerance of your portfolio.

Weekly Data Recoding and Analysis: 30% You will calculate the weekly return and standard deviation as well as annualized return and standard deviation from your weekly portfolio Value. Weekly return and standard deviation from S&P500. Comparison of your portfolio return and risk with those from S&P500. Sharp ratios of your portfolio and S&P500.

Application of investment theory: 30% Explain as much as you can the investment theory you learned from this session that can be applied in this project.

Summary of the Case: 10% Total 100%

Note: (1) Make sure your report includes each element mentioned in the matrix above for the grading! (2) No video presentation is required for this session

Note: Please refer to the example below for your project data collection. To help you understand how to collect data to perform your portfolio analysis, I am providing the following example for your reference. This example has two parts. Part 1 is about data collection and part 2 is about portfolio performance calculation. Part 1: data collection The data we need:

1) Weekly data for your stocks

2) Weekly data for S&P 500

3) T-bill rate

1) Weekly data for your stocks

What stocks to choose for your portfolio? You may use Yahoo Finance, stock "Screeners" for selecting the stocks.

Click "Screener", I have the following page

You may choose your own criteria to choose your stocks. I use predefined criteria "Growth Technology Stocks." I get the following page

For simplicity of explanation, I choose only two stocks in the list (You may choose more stocks in your portfolio): Apple and AMD.

Click AAPL, I then get the following page. I then click Historical Data

I get the following historical data page. I then click Weekly for frequency and I have the following one year weekly price for Apple stock. Please note to use Adjusted Close price for your data. The adjusted close include the dividend information.

Click Download button and you will get the data from an Excel file

Please repeat the above steps for the other stocks you selected to get the weekly historical price

2) Collecting Weekly data for S&P 500

2) Collecting Weekly data for S&P 500

I then click the S&P500 index to get the historical data for S&P500 index as a market portfolio

I have the following weekly S&P500 data.

Please note that sometime, Yahoo finance doesn't showdownload button. You may just highlight the data and then copy and paste the data in Excel.

The data in the table above is arranged in reversed chronical order. Please sort the data by date to get the data in chronical order as follows: 3) T-bill rate

To find T-bill rate for risk free rate proxy, I google "T-Bill rate today"

I see two numbers, 0.09% and 0.17%. I will take the average of the two numbers to get my proxy for risk free rate.

Part II Portfolio performance Computation I now put all the data in an Excel file. You may open the Excel file to check the formula for the calculation of average returns, standard deviation, Sharpe ratios, CAPM calculation, and alpha (or abnormal) returns.

Please note I divide the fund among the investments equally. But you may distribute different percentage of your fund to your stocks. I bought 6498 shares of Apple ($500000/2=6498.8974) and 9400 shares ($500000/2=9400.264) of AMD.

To prepare your report, you may visit Slideshare.net

Type "Investment Analysis Project" in the search bar

The search will result in a list of investment analysis project report. Click the reports to get some idea how to write your report. Some of those reports are very long, but you don't have to follow their length. Remember there is no requirement on the number of pages. Just make sure your explanation is clear and to the point. Finally, prepare your report in a PowerPoint document.