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FINANCIAL ANALYSIS AND INVESTMENT

MN7022 Assignment 

Assessment 2022-2023

Deadline:15^th December 2022 by 3:00 PM UK-time Word

Assignment Questions [All questions should be answered] 

[50% of Marks] [1500 Words (+/- 10%)] 

Collect monthly prices for 7 (seven) stocks/assets of your choice for the last 10 (ten) years traded in a market (of your choice). Use the data to construct one portfolio (i.e. same stocks/assets). However, use it to generate three objectives the first is to maximise returns and the second is to minimise risk, the third is to maximise sharp ratio. In other words, same stocks three portfolio-scenarios/objectives one is profit maximisation and the second is risk minimisation, the third is maximising sharp ratio. For each scenario/objective report the annualised optimised portfolio weights, the expected returns, and risks in addition to any other necessary performance indicators. Report the weighted average portfolio-beta for each portfolio scenario/objective. Use available data that can be easily obtained online or via Bloomberg. Use dividend adjusted close prices.  

Guidance: 

1. Use the knowledge gained from Transferable Skills documents of estimating CAPM or Estimate Market model using regression analysis and other functions in Excel.

2. Calculate each stock monthly return using Excel  

3. Calculate each stock variance and standard deviation using Excel

4. Use the SOLVER functions in Excel to optimise portfolio return, risk and sharp ratio

5. Present the work in a professional investment report and provide comments on the results.

6. Provide sufficient justification for the choice of stocks/assets and the market.

7. Make sure to collect stock/asset prices that are dividends adjusted.

8. Provide sufficient justification on the choice of the proxy (index) of the market 9. portfolio.

10. Present Tables in an organised manner with captions. Maximum four Tables are allowed within the text. Extra Tables can be moved to the appendix at the end.

11. Support the answers with graphs and formulae where appropriate. Maximum three to four graphs are allowed within the text. Extra graphs can be moved to the Appendix at the end.

12. Formulae should be written using the equation function in Word. Students may include the formulae in the footnote of the page or move it to the appendix at the end to save space.

13. Support the answer with relevant academic references using Harvard Style.