Assignment 1 - Creating and Managing a Portfolio 1

Assignment 1 - Creating and Managing a Portfolio 1 -...

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ACTIVATION #: H17401 70% equity ($350,000), 20% mutual ($100,000), 5% swiss bond ($25,000), 5% cash ($25,000) Client Financial Profile o Financial profile Assets o Risk profile – tolerance (fictitious questionnaire can answer) Age (older less risk than younger) Wealth o Taxes Stocks – non tax deferred Bonds – tax deferred (pay at end) List transactions by type, date, and amount At the end of each trading week produce a pie chart Analysis of the performance of your portfolio Sharpe ratio (every day, portfolio return/value), treynor ratio, Jensen alpha. Assignment #1 – Creating and Managing a Portfolio Each team must create and administer a portfolio with Stock-Trak ( www.stocktrak.com /cj). Although each member of a team is expected to participate in the selection, analysis, and trading of securities each team will have to manage only ONE account. In order to register with Stock-Trak you will need an account number from the instructor and also the certificate number you will find in a new copy of the textbook “Fundamentals of Investments” 4 th edition, by Jordan and Miller. 1 The purpose of this assignment is to familiarize you with different financial securities and with all the decisions involved in managing a portfolio. You will have to invest the portfolio in several assets and financial instruments as stocks, bonds, mutual funds, currencies, options and futures. At the end of the semester each team will have to present a summary report of the portfolio’s trading and performance. The report will have to include a brief investment policy statement explaining the investment objectives for the portfolio (max. 2 pages). The policy statement will have to specify the investment horizon, liquidity needs, and
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Assignment 1 - Creating and Managing a Portfolio 1 -...

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