Project Part 4 Assignment

For this Part, you will be making a report to your investment committee that discusses and
summarizes the performance of your stock portfolio. Use closing prices as of Thursday of
Week 13, April 13, to calculate your returns. What is the final market value of your portfolio
(including dividends received and added to non-interest earning cash)? If the final market
value of your portfolio is less than $1,000,000, your portfolio lost money.
Provide a graph of the daily stock prices (high, low, and closing) for each of your stocks.
Include the daily volume on each graph, with the scale shown on the right side of the graph.
Be sure to label the graphs!
Provide a graph of the value of your portfolio and the value of the closing S&P 500 if
$1,000,000 were invested in that initially. This is the normalized value. By normalized, you
have scaled the S&P 500 closing prices so that its price on the first day ($1,000,000) is the
same as the portfolio’s closing price on that first day.
In the final section of your report, recommend for or against the inclusion of each of these
stocks in the portfolio and defend your recommendation. Use the information you have
obtained in Part 1 Deliverable 2 to support your argument.
Calculations: Use the closing price of your stocks on Thursday of Week 13, April 13, to
calculate your returns.

1. Report the “purchase” and “sale” price of your stocks from the beginning and end
of the semester along with any dividends you might have received. Calculate the
buy-and-hold return of each stock [(MVend – MVbeginning + DIV) /
MVbeginning] and the buy-and-hold return on your portfolio.
2. Determine the final market value of your portfolio (including dividends received).
If the final market value of your portfolio is less than $1,000,000, your investment
lost money.
3. Calculate the market value of
o Your portfolio for each day (including cash). I suggest that you do this
by adding up the daily closing market values of your assets held and
the cash you hold, including the total dividends received up to date.
o The S&P 500 index portfolio over this same period assuming you keep
the same amount in cash. We are using the S&P 500 index as our
proxy for the market.
4. Plot the daily market value of your portfolio and the daily market value of the
S&P 500 using your calculations in #3.
5. Using the market values you calculated in #3, calculate the daily returns (percent)
for
o Your portfolio.
o The S&P 500 index portfolio.
6. Using your calculations in #5, calculate
o The average daily return and the standard deviation of daily returns for
both the S&P 500 index and your portfolio.
o Your portfolio’s beta by calculating the covariance of your portfolio’s
daily returns with the S&P 500’s daily returns and dividing that by the
variance of the S&P 500.
Write-up: Assume that you are preparing a relatively short report (maximum of 10 pages
double-spaced) for your investment committee. You will be graded on the quality of your
writing as well as the quality of your analysis. Do not simply answer the following questions
– this should be financial report! These questions are intended to provide guidance.

1. Introduction
2. Comment on your individual and portfolio returns. Include information and
events, both individual firm-specific or market-wide, both within the U.S. and
globally, that may have impacted the performance of your stocks. This should
include the performance of international financial markets related to this
information and these events. (Suggested length: one short, concise paragraph for
each stock and one for the portfolio). Describe and explain any trades you made.
3. From your calculations, if you held the S&P 500 instead of your stocks, with how
much money would you have ended? Would you have been better or worse off
having held the index? Analyze the reasons for any differences.
4. Based on your calculations for standard deviation and beta, how risky was your
portfolio compared to the index? Again, analyze the causes of the differences.
5. Finally, what are your plans going forward? That is, if this class continued and
you had the chance to alter your portfolio holdings now, would you choose to sell
any of your stocks or would you want to keep holding them? What will you tell
the investment committee? Be explicit.

Deliverables:

1. Your report (8 - 10 pages double-spaced, 12 pt. font) plus graphs.

2. Spreadsheet of returns and calculations, and market value plot – 2-pages
maximum – make it neat and readable.
3. The due date for this Project Part is Thursday, April 20, 2023 (Week 14) at
11:59 PM Eastern Time. Late Project Part submission will be marked down
10% per day.

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