Based on the tasks explained below, write a report of no more than 2000 words. Note that share price data is available from Yahoo Finance and further financial data is available from Osiris a company database that can be accessed using the University library database. The tasks and their marks distribution is as follows:
Carry out a risk and return analysis of 20 stocks taken at random from the FTSE 100 and analyse as follows:
Construct a risk and return profile of each of the twenty stocks over the last 5 years based on monthly observations (e.g. use the search box on this page click here). 20 Marks
Evaluate your results and recommend stocks for a prospective investor who is:
Risk Averse.
Risk Aggressive.
20 Marks
Total 40 Marks
Portfolio Risk and Return Analysis
Construct a high risk and a low risk equally weighted portfolio of 8 stocks each drawn from the stocks you have analysed previously. Explain carefully your rationale for including each stock in the particular portfolio. 25 Marks
Report on the risk and return of each of the portfolios you have constructed in part a of this question including an assessment of their suitability for investors with varying degree of risk preferences (you may assume that investors also have the opportunity to invest in a risk free asset).
25 Marks
Total 50 marks
Provide a reflective summary of your understanding of portfolio management theory and practice. Use lessons from the exercises you have done in previous sections. Total 10 Marks
