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Learning objectives
To appreciate that different opinions can be formed about the state of the economy and
sector performance given the same information.
Each week a discussion should take place amongst all of the group members as to how much
to weight each sector (i.e. corresponding to a weight for the underlined share), to form the
initial portfolio.
To allocate a percentage of your portfolio to each sector your group should have a grasp of
how the sector relates to the economy and where in the cycle of the economy we are at the
moment. General reading of the financial press can help here. Each student must negotiate the
weight allocation of their sector with the entire group. The group leader resolves any
disputes.
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For example your portfolio may look like this in the first week of trading, week 4:
FINANCIALS: (20%) National Australia Bank (NAB) (1) vs. Westpac (WBC) (2)
CONSUMER STAPLES: (50%) WesFarmers (WES) (3) vs. Woolworths (WOW) (4)
MINING (30%): BHP Billiton (BHP) (5) vs. Rio Tinto (RIO) (6)
This is how your portfolio will look at the beginning of trading. However, this assignment
asks you to make changes to your portfolio as your thoughts about how maximize profits
evolve. You can change your initial weights, go from long to short or even change your initial
stock selection (you can only be invested in one of the two stocks in a sector). You should
read the financial press. Indeed you will be asked to comment on these issues weekly (see
section A). You can discuss any developments with your group members when you meet
each week in your tutorials. This is when you will have the opportunity to make changes to
your portfolio and most importantly debate those changes amongst your group members and
between the other groups in your tutorial (see section B below).
Group 2
Group 3
The tutor will simply decide who wins each criterion (no ranking will be given). The group
that gets the highest marks wins and obtains 100%, the team that gets second 75% and each
other team 50% for the week.
To be eligible for debate marks each week:
Each group must submit a soft copy of the weeks market summary via email to
their tutor the day before their tutorial. This ensures collaboration and communication
between group members prior to the tutorial debate.
At least two-thirds of each group (i.e. four individuals for a group of six) must attend
the weekly tutorial debate each week; else the entire group will receive zero for that
weeks debate.
Step 1: Go to Yahoo! Australia and sign in. If you do not have a Yahoo! Account, you have to sign up first.
This is free.
Step 2: After logging in, click Personal Finance on the left panel.
Step 3: Then click Finance Home Page and the portfolio management tool is just up there. You can create a
new portfolio or manage existing portfolios.
Step 4: If you try to create a portfolio, you have to enter a name for the portfolio and stock symbols which you
want to watch and click Finish button. Note for Australian stocks you may need to use the format xxx.AX.
E.g. BHP.AX
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