How to develope combined-asset portfolios, Portfolio Management

Assignment Help:

You are going to develop two multi-asset portfolios from the stocks you chose.  Place the information for these steps in the "Portfolios" worksheet.

Step 1) The first portfolio will have equal initial investments in the four stocks. Calculate the periodic return for this portfolio as the average of the 4 individual stock returns for each and every month.  Next, construct a cumulative return for your equally weighted portfolio.  To compute the cumulative return, set the February1998 value to 1.0000.  Then compute the March 1998cumulative return as the February 1998 value times the quantity 1 plus your periodic return forMarch. Drag this equation down the page.

Step 2) The second asset will be a market-cap weighted portfolio.  You will need to once again visit the yahoo.finance.com site and find the market capitalization or market value(aka "Mkt Cap") for each stock. Go to the initial company page to obtain the current price, and go to Key Statistics (on the left) to obtain current shares outstanding. To determine your initial allocation you will need to sum the 4 capitalizations and then divide each of your stock's "mkt cap" by the sum of the mkt caps. Thus you will have one set of weights based on current price and shares outstanding, and you will use these weights for the entire period.Next, to determine your returns compute a weighted average return for each month based on the weightings you just computed.  Display the information on price, shares outstanding, and market cap for each stock on the top of the Portfolios sheet. This will give you 4 market value weightings based on relative market values in February 1998.

NOTE: If you picked a stock that has any missing data prior to 2003, you will have to compute 2 sets of weights.  The equally weighted portfolio will have weights of 1/3 for each stock during the portion of the time period that has only 3 stocks and the weight of each stock will change to 1/4 as soon as the return sequence starts for the fourth stock.  Your market value weights will similarly change when the fourth stock's return sequence begins; however, each stock will have different weights.  Remember that in both weighting schemes the sum of the weights should be 1.0 or 100%


Related Discussions:- How to develope combined-asset portfolios

Case study, you have to study case and than you have to fill the table that...

you have to study case and than you have to fill the table that teacher had given.

Market Beta, The management of Nelson plc wish to estimate their firm’s equ...

The management of Nelson plc wish to estimate their firm’s equity beta. Nelson has had a stock market quotation for only two months and the financial management feels that it would

Derivatives, 2. The futures price for the June 17, 2009 CBOT bond futures c...

2. The futures price for the June 17, 2009 CBOT bond futures contract is 118-23. (a) Calculate the conversion factor for a bond maturing on Jan 1, 2025, paying a coupon rate of 9

S.D, WAHAT IS RISK ANALYSIS

WAHAT IS RISK ANALYSIS

Hatch system of stock investment, b) Mr. Castro uses a 20% hatch system of ...

b) Mr. Castro uses a 20% hatch system of timing when to invest in a stock market. In a given, the top of a given share was Shs.150/= and its bottom was Shs.90. During the year the

Management, explain phases of portfolio management?

explain phases of portfolio management?

Financing, #questYou have the following limited information upon which to b...

#questYou have the following limited information upon which to base your decision as to which is the better of two alternative funding arrangements: • Alternative 1 is to arrange f

American opportunity tax credit, A tax credit that allow more student and p...

A tax credit that allow more student and parents to pay for portion of their college expenses in the 2009 and 2010 tax years by increasing the existing Hope tax credit. The highest

International finance , Plot the factors that affect the exchange movement ...

Plot the factors that affect the exchange movement vs the LCU/US$ between us and uk from 2001-2011 in different diagrams

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd