***The companies have already been selected
Abstract or executive summary is needed
Students will construct three, investment portfolios during week
For each portfolio, write an explanation of your goal and a quick Investment Policy Statement. “The active portfolio is for an aggressive investor who aims to beat the S&P 500 by 7%” or “The Passive portfolio is for a long term conservative investor who would like to earn income of 3% per year over the CPI.”
Part I
State the objectives for the construction and management of each of the three (3) portfolios.
1. This includes your policy statement (why were certain stocks purchased), strategy, asset allocation, and industry analysis.
2. Implementation and application of specific and well-articulated portfolio management strategies; portfolio design, security selection criterion, initial and final Portfolio value.
3. Show time series record including, price, value, cash, return, cumulative wealth, and profit and loss table with discussion.
***On Friday at the closing, sell all securities. Record the ending prices.
Part II: 3-Portfolio Case Evaluation and Assessment
Data analysis and Critical Thinking for each of the three (3) portfolios
1. Compare P1 to P2 to P3. Which portfolio made the most profit or had the greatest losses?
2. Complete the following analyses of P1, P2, and P3.
A. Return of investment
B. Expected rate of return
C. Variance
D. Standard deviation
E. Risk return analysis
3. Compare the returns (or losses) of P1, P2 and P3 to:
A. The S & P 500
B. Dow Jones Industrial Averages
C. Russell 2000.
4. Use the Sharpe and Traynor formulas to evaluate P1, P2, and P3
Part III: Quantitative Analysis and Critical Thinking – Summarization
1. Accurate computation of statistics, use of quantitative methods, utilizing professional analyses and critical thinking; when comparing and contrasting the 3-portfolios.
A. Active versus passive portfolio management
B. Strategic versus tactical asset allocation
C. Observations of the 3-Portfolio Case Study
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