Your client has an insurance policy that just matured at a value of $500 000. She has

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Question:

Your client has an insurance policy that just matured at a value of $500 000. She has decided to use this money to further invest in the Barbados Stock Exchange Market (BSE).
Along with the company analyzed for your individual assignment, you are required to adhere to the following instructions for creating an investment portfolio for Ms. Shurma Greenvale:
A. Go to the Barbados Stock Exchange Market (BSE), select TWO (2) other stocks for Ms. Greenvale’s portfolio and retrieve the daily stock prices for each stock for the period September 04th to October 29th, 2022;
i. Prepare a table/schedule showing the average stock price per week for EACH stock.
(8 marks)
B. Give a brief background to EACH company and use information extracted from their financial statements plus any other current information to say why those companies were chosen.
(9 marks)
C. Using the average prices computed from the table under task A compute the following:
i. The average returns (arithmetic mean) for each stock (8 marks)
ii. The standard deviation for each stock (12 marks)
D. Calculates the coefficient of variation for each of the stocks. (6 marks)

E. Explain the efficient frontier as a tool that is used by investors to make investment decisions.
(4 marks)
F. You are to create a portfolio from the stocks you have selected and invest 100% of the funds in the portfolio. You are now required to:
i. Weight your funds to the various stocks in the portfolio and explain why the weighting was selected. Show weight and money value allocated to stocks in the portfolio.
ii. Calculate the expected returns of the portfolio (3 marks)
iii. Calculate the covariance between the assets (6 marks)
iv. Calculate the risk/standard deviations for the portfolio (4 marks)
G. Explain why the correlation between stocks is important. (2 marks)
H. Assess Ms. Greenvale’s wealth after the two months and evaluate whether you would have changed her portfolio. State what you would have done differently to improve the portfolio performance.