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FINU9QE assignment - worth 100%

Assignment deadlines:

Part A in week 6 (20/10/23 @ 13:00) the strict word limit is 1000 words (maximum) – weight 30%

Part B in week 12 (01/12/23 @ 13:00) the strict word limit is 2000 words (maximum) – weight 70%

Assignment brief

You are an investment analyst and you have been tasked with preparing a report for your client assessing the performance of an index/portfolio (of stocks) with the aim of providing investment recommendations. For this task you needed to consider the market (FTSE 100 index), the FTSE4Good Index (an index including companies that follow specific Environmental, Social and Governance (ESG) practices) and the economic environment.

Requirements:

Produce a report where you address and discuss the following:

Part A – (1000-word report - maximum).

· Construct an index/portfolio. Discuss your approach and rationale of your choices.

· Compare the performance of your constructed index/portfolio to the FTSE100 and the FTSE4Good indices and provide investment recommendations.

Part B – (2000-word report - maximum).

· Construct a model assessing the relationship between your index/portfolio (from Part A) and the market (FTSE 100) index - name this model A. Discuss your regression findings in explaining the returns of your index/portfolio.

· Construct a model assessing the relationship between your index/portfolio (from Part A) and your chosen macroeconomic variable(s) - name this model B. Discuss your regression findings in explaining the returns of your index/portfolio.

· Construct a model assessing the relationship between your index/portfolio (from Part A), the market (FTSE 100) and your chosen macroeconomic variable(s) - name this model C. Discuss your regression findings in explaining the returns of your index/portfolio.

· Discuss which from the above models does a better job in explaining the relationship between the performance of your index/portfolio and the various explanatory variables (FTSE 100 & macroeconomic variable(s)).

· Based on your above findings provide investment recommendations.

Important Notes:

The purpose of the assignment is to assess knowledge and understanding of all the Module Learning Outcomes:

• Calculate and interpret descriptive statistics.

• Conduct and critically interpret simple and multiple regressions using the OLS method.

• Demonstrate an ability to apply the basic principles of time series analysis.

The data for the FTSE100 index and each stock/company of the index and the FTSE4Good index can be found on CANVAS. The data are in monthly frequencies.

• For Part A

• The maximum word limit is 1000 words.

· Report your word count under the executive summary.

· The expected structure is that of a report with the following sections/parts:

• An executive summary (of no more than 100 words).

• An introduction.

• A main part (with subsections addressing parts the points of the assignment brief).

• A conclusion.

• A referencing/bibliography section – this does not count towards the word limit.

• An appendix (if necessary) - this does not count towards the word limit.

· Use MS Excel software for your analysis and estimations.

• Construct an index/portfolio using five stocks from the FTSE 100 index (justification of your choices is expected). Start the index on the first month at 100. Each stock/company should be equally weighted in the index (provide justification if otherwise).

• To compare the performance of index/portfolio use descriptive statistics and correlations.

• Produce and present your findings using graphs and tables (descriptive statistics, correlations, regression outputs etc. in relation to the task). The tables and graphs should be well-presented and reader friendly and should be followed by discussion and analysis. Tables and their content do not count towards the word limit.

• Do NOT copy & paste MS Excel outputs in your assignment, present your results in reader friendly tables.

· Consider the time series principles discussed in classes and labs.

· Discuss the statistical and economic significance of your findings.

· Knowledge from other finance modules can be used.

· You can use both the academic and non-academic (news & reports) literature in your discussion and analysis.

· Include in the appendix (appendices), details of your calculations if necessary.

· Make sure you reference all your sources – follow the Harvard Stirling University style.

· Submit ONE document only, therefore, tables and graphs need to be placed in the core of the report.

· Clarity of language, writing style, structure & presentation of the submission are all important.

· The report can be in MS Word or pdf form.

· Do NOT submit an Excel spreadsheet file.

· Very helpful information on university writing can be found on Canvas on the home page of every module. Towards the bottom of the home page, you will find the Stirling Essentials tab. I would strongly advise you to explore this area as it will help you with information about assessment and studying at Stirling. You could also make use of the Student Learning Services, please visit the following site for further information:

(https://www.stir.ac.uk/student-life/support-wellbeing/student-learning-services/

• For Part B

• The maximum word limit is 2000 words.

· Report your word count under the executive summary (the executive summary should be no more than 200 words).

· The expected structure is that of a report with the following sections/parts:

• An executive summary (of no more than 200 words).

• An introduction.

• A main part (with subsections addressing parts the points of the assignment brief).

• A conclusion.

• A referencing/bibliography section – this does not count towards the word limit.

• An appendix (if necessary) - this does not count towards the word limit.

· Use MS Excel software for your analysis and estimations.

• To model the relationship between your index/portfolio, index or indices and macroeconomic variables use regression analysis.

• Produce and present your findings using graphs and tables (descriptive statistics, correlations, regression outputs etc. in relation to the task). The tables and graphs should be well-presented and reader friendly should be followed by discussion and analysis. Tables and their content do not count towards the word limit.

• Do NOT copy & paste MS Excel outputs in your assignment, present your results in reader friendly tables.

· Find and use macroeconomic variables from sites such as the Office of National Statistics, Bank of England, World Bank, International Monetary Fund etc., or using the sources available from the library.

· Consider the time series principles discussed in classes and labs (lags etc.).

· Discuss the statistical and economic significance of your findings.

· Knowledge from other finance modules can be used.

· You can use both the academic and non-academic (news & reports) literature in your discussion and analysis.

· Include in the appendix (appendices), details of your calculations if necessary.

· Make sure you reference all your sources – follow the Harvard Stirling University style.

· Clarity of language, writing style, structure & presentation of the submission are all important.

· Submit ONE document only, therefore, tables and graphs need to be placed in the core of the report.

· The report can be in MS Word or pdf form.

· Do NOT submit an Excel spreadsheet file.

· Very helpful information on university writing can be found on Canvas on the home page of every module. Towards the bottom of the home page, you will find the Stirling Essentials tab. I would strongly advise you to explore this area as it will help you with information about assessment and studying at Stirling. You could also make use of the Student Learning Services, please visit the following site for further information:

(https://www.stir.ac.uk/student-life/support-wellbeing/student-learning-services/