...risk of investors, our objective is to maximize the return while minimizing the overall risk level of the investment to accomplish the maximized wealth. The major reason behind high level tolerance for risk is the return expected through the investment is high. Always we tried to maintain better relationship between the expected return and cost of investment. Except our main objective there are some co-objectives those are, * Mitigation of Risk To construct efficient and well diversified portfolio three persons are joined together through that we can manage and bear risk among us. On the other hand single marital status, young age and relax feeling of family responsibilities rub up the high tolerance level for risk. * Maintain an appropriate degree of portfolio diversification We will maintain efficient diversification portfolio at all time and it should be matches with the reasonable sector allocation. * Rebalancing of strategic allocation Assets allocation must matches the portfolio risk tolerance But as rational investors we cannot rely upon the stable objectives and time to time based on economic conditions objectives may differ. Therefore we have to alter our objectives according to economic condition to obtain highest return while maintaining lower risk....
Words: 12575 - Pages: 51
...FINANCE PORTFOLIO ANALYSIS FINAL WORK DESCRIPTIVE ANALYSIS AND APPLICATION OF THE PORTFOLIO THEORY Abstract The main objective of the work is to construct, through application of the Portfolio theory, an efficient frontier which represents a set of portfolios with optimum risk-return ratio for ten companies from Mexican IPC. The sample used in this work is composed of the most representative companies in this index. A descriptive analysis of the behavior of the stocks included in this study is carried out using the binomial risk-return, which significantly contributes in selecting the most suitable stocks to be included in the portfolio. The work is concluded with finding an optimal portfolio for a risk adverse investor. The main conclusions from study are the poor performance of the construction sector, which holds the lowest returns, the highest risk and negative performance ratios, and the usefulness of the theory of portfolios to get a set of portfolios with higher returns and lower risk than the general Mexican IPC index that represents the market. The importance of diversification of assets is also noted. Keywords: Portfolio theory, Efficient Frontier, Risk-Return, Minimum Variance, Portfolio Contents 1. Introduction 6 1.1 Introduction 6 1.2 Goals 7 1.3 Methodology 7 1.4 Structure 9 2. Theoretical Framework 11 2.1 Risk and Return 11 2.1.1 Portfolio’s Expected Return 12 2.1.2 Portfolio Risk (Standard Deviation) 13 2.2 Diversification...
Words: 17742 - Pages: 71
...Portfolio Analysis A portfolio is a combination of securities. Portfolio analysis provides a framework by which the investors can identify optimal portfolios from a universe of infinite portfolios. Investors need to estimate the expected return and variance of each security under consideration for inclusion in the portfolio along with all the covariances between securities. With these measures the investors proceed to calculate the expected return and risk of alternative portfolios to evaluate their desirability and derive a set of efficient portfolios. Notations wi = percentage of investor’s funds invested in security i wj = percentage of investor’s funds invested in security j [pic] = expected return on security i [pic] = expected return on security j (2i = variance of return on security i (2j = variance of return on security j (ij = covariance of return on security i and j (ij = correlation of return on security i and j [pic] = expected return on the portfolio (2p = variance of return on the portfolio 2-Security Case The expected return of a portfolio is an weighted average of the expected return of the securities, where the weights are percentage of investor’s funds invested in the securities: [pic] = wi [pic] + wj [pic] The variance of a portfolio is a weighted average of the variance of the individual securities plus the covariance between the two securities in the portfolio: (2p = w2i (2i + w2j (2j + 2wi...
Words: 1746 - Pages: 7
...PORTFOLIO ANALYSIS: SEPARATING WINNERS FROM LOSERS IN THE ASSOCIATION WORK PLAN Once an association has adopted a strategic plan, the next step is to convert the goals and objectives in that plan to a work plan and budget. But how can this be done? Every association program or service has a constituency and a claim on resources. How then to weigh the allocation of scarce resources to ensure that the objectives of the plan are attained and member needs are served? Portfolio analysis has been devised to help associations bridge the gap between strategy formulation and strategy implementation. In other words, it helps you make the hard choices of where to put your money. It is the creation of Dr. Ian MacMillan of the University of Pennsylvania’s Wharton School and the basis for The Forbes Group’s model. What Portfolio Analysis Is Portfolio analysis is a systematic way to analyze the products and services that make up an association's business portfolio. All associations (except the simplest and the smallest) are involved in more than one business. Some of these include publishing, meetings and conventions, education and training, government representation, research, standards setting, public relations, etc. Each of these is one of the association's strategic business units (SBUs). Each business consists of a portfolio of products and services. For example, an association's publishing business might include a professional journal, a lay magazine, specialized...
Words: 2855 - Pages: 12
...Final Analysis Robert Patterson BUS655: Financial Investment Management Instructor: Scott Shaw Submitted September 14, 2015 Final Analysis When this portfolio was developed there was no experience and very little knowledge behind the investments. The investments were chosen based on quick internet research, information from investment TV shows, gut feeling, and the closest relatable past experiences. Hence the need to analyze the portfolio. The requirements for the portfolio were that it must include 100 shares of a publicly traded company, one corporate bond, one mutual fund, 100 call or put options that are at least 6 months out, and any leftover cash be put into a 6 month Certificate of Deposit (CD). The portfolio was $10,000 and 100% had to be invested. All relevant data on values, weightings, and so forth can be found in Table 1. All calculations are based on final values collected September 9, 2015. Even though the market did not perform well over this period and the portfolio was not constructed well, it seems to have performed well. The shares of a public company were invested in BP stock. An oil company was chosen due to previous work experience in the oil industry. The oil and gas market had been on a downward decline for quite some time but had seemed to have levelled out. The fact that the market had declined slowly means it is more along the lines of a recession instead of a market crash. This led to the thought that the price might have reached...
Words: 2597 - Pages: 11
...work and needs to plan accordingly. One main question that is always a difficult one to answer is how long one needs to work before they can comfortably stop working and rely on their financial portfolio to take care of expenses after work. In order to analyze these questions, a deterministic model of an investment portfolio was created and stochastic modeling was used to determine the likelihood of being able to accumulate the necessary finances over the desired period of time. Quantitative Analysis: 1. Using the given deterministic model, the annual outflows were estimated from the retirement portfolio over the retirement years and the estimated return on the account was also calculated. It was determined that under these basic assumptions of salary and portfolio growth rate the portfolio could expect to grow to $452,900 within thirty years. However, this assumed a fixed salary growth rate of 5% as well as a 4% annual investment rate. Given the high rate of inflation and the projected expenses after retirement, it was calculated that if this money was to last for the retirement, then even pulling out $50,000 per year in expenses would cause the account to run out after just a few years. 2. Adjusting the annual rate to 8% from 4% had a major effect. Although the portfolio fell short of the one million dollar goal by only reaching $853,633, this was a major effect as it allows the individual the ability to pull $100,000 each year from this account and still sustain...
Words: 1708 - Pages: 7
...A report of Team D-1’s Analysis Of The Black & Decker Corporation in 2000 Executive Summary Black & Decker had always been a market leader in the power tools industry. Many changes took place that helped out in the company in the short run, but hurt in the long run. In 2000 Black and Decker Corporation was still reeling from the financial and strategic problems stemming from the company's acquisition of Emhart Corporation in 1989. In late 1998 Black & Decker management celebrated the completion of an almost decade-long effort to divest nonstrategic business gained through its 1989 acquisition of Emhart Corporation and expected the company to enter a long-awaited period of growth as its entire management refocused its attention on its core power tools, plumbing, and security hardware business. Archibald believed that "This portfolio restructuring will allow us to focus on core operations that can deliver dependable and superior operating and financial results." However the portfolio restructuring did little to improve the market performance of the company's securities. Yet Archibald and the management continued to express confidence that the company's streamline portfolio would allow Black & Decker to achieve revenue and earnings growth that the market would find impressive. So far the 1998 divestitures have not produced steady increases in the company's stock price, but look promising for the future due to the efforts to refocus efforts on the successful power tools...
Words: 1575 - Pages: 7
...Portfolio analysis The total amount of capital invested in the portfolio is 100 000 000 CHF. We have invested the capital in several ways like: treasury, stocks and bonds. Treasury We have invested 10% of our total capital in our portfolio in different countries as follows: The amount of capital invested per country is 2 500 000 CHF. The most attractive investment in in Brazil has an interest rate per year of 9, 5%. To secure all of our investment we have subscribed to an option to insure that the exchange rate given is close to the exchange rate of the beginning. For this option, we used the futures in the market. the futures transaction is to fix the price, quantity and date of the future exchange on the day of the operation. Its usefulness lies in the fact that it provides a hedge against unfavorable changes in exchange rates. So, in this investment we invest 100 000 000 CHF and we will expect to receive an amount of 10 756 250 CHF when the investment is invested during one year. The Gain in this investment is 7, 56%. Stocks For this part the total of our investment represent 60% of the total amount of portfolio representing 60 000 000 CHF. In the beginning, our different investments in stocks are as follows: We invest in 28 different stocks in this several region : In this following sector : The choice of its several stocks is based of an overview of the regions and sectors chosen. After this...
Words: 879 - Pages: 4
...Kochman’s and Badarinathi’s mathematical case for upside deviation deals with portfolio upside deviations being divided by a market’s upside deviations to so show the resulting ratio and how it facilitates other tests for positive or negative skewness. The article discusses how CAPM is inappropriate for the evaluation of portfolios given that is not only assumed that the returns on distributions are symmetrical, but that the beta (performance and return-to-risk ratios) underestimates the risk of larger numbers of mutual funds. Kochman and Badarinathi needed to answer two questions; can upside deviation be the means for portfolio evaluations and can this be done by taking the upside deviation of portfolios and divide those figure by the upside deviation of the market? Kochman and Badarinathi believe that to make a case for upside deviation as a means for portfolio evaluations is to take the upside deviation of the portfolio(s) and dividing it by the market(s) upside deviation. This would result with a ratio that facilitates another test of positive or negative skewness. To test whether the ratio of portfolio-to-market upside deviations as a success, a test on fund returns would need to be conducted to ensure a meaningful difference between upside deviations, portfolios, and markets. The overall findings showed that the relationships between low betas and low upside volatility appeared to be weaker than the relationships between high betas and high upside volatility. In addition...
Words: 268 - Pages: 2
...Rock, Paper, Scissors, and Other Investment Techniques (UOP) FIS 240 Week 5 DQs (UOP) FIS 240 Week 6 CheckPoint: So Many Businesses, So Little Money PART 1 OF 2 (UOP) FIS 240 Week 6 CheckPoint: So Many Businesses, So Little Money PART 2 OF 2 (UOP) FIS 240 Week 6 Assignment: Analyze This (UOP) FIS 240 Week 7 DQs (UOP) FIS 240 Week 7 CheckPoint: Income that Sticks PART 1 OF 2 (UOP) FIS 240 Week 7 CheckPoint: Income that Sticks PART 2 OF 2 (UOP) FIS 240 Week 8 CheckPoint: Lifetime Investment Matrix PART 1 OF 2 (UOP) FIS 240 Week 8 CheckPoint: Lifetime Investment Matrix PART 2 OF 2 (UOP) FIS 240 Week 8 Assignment: Living the Easy Life (UOP) FIS 240 Capstone Discussion Question (UOP) FIS 240 Final Project: Investment Policy and Portfolio Evaluation (UOP) ____________________________________________________ FIS 240 Week 1 CheckPoint: Is Time on My Side (UOP) For more course tutorials visit www.tutorialrank.com Resources: Appendix D and the Time Value of Money multimedia (enter into the Axia College student webpage first then copy and paste the link into the open browser) TUhttps://ecampus.phoenix.edu/secure/aapd/UBAM/Libraries/Flash/TVM.swfUT. Due Date: Day 5 [post to the Individual forum] Complete your responses to this week’s CheckPoint in Appendix D. Post the completed...
Words: 643 - Pages: 3
...Portfolio Analysis: The Market Position Juanita Williams American Intercontinental University August 30, 2015 Dr. Christopher Miller Portfolio Analysis: The Market Position The decision making process among hospitals are very complex, therefore, it has become more prevalent to use a portfolio analysis in there strategic planning process. The portfolio analysis will help any organization address some of the obstacles they face such as the appropriateness and measurement of growth (McCain, 1987). It is an important aspect of evaluating when the organization has the idea to start a new project or not. In he portfolio analysis the services and products are being analyzed in relation to the market growth and the market share (AIU, 2015). It is best to know who your biggest competitors are and also know who holds the biggest share of the market. Once this is known then these should be compared to all other competitors and see what the market growth is. Health care organizations will use the portfolio analysis not only to look in to their services and products provided, but into all of the organization’s department. We will take a look at how the Sisters of Charity Hospital can use a portfolio analysis within their market for growth. The hospital is located in Columbia, South Carolina as well as Cleveland and Canton, Ohio. This organization provides many different services such as service for the elderly, blood conservatories...
Words: 1824 - Pages: 8
...COMPUTER ASSIGNMENTAUTUMN SESSION 2012SCHOOL OF COMPUTING, ENGINEERING & MATHEMATICS | | | Student Name and ID number | Group Member 1 | Matthew Yee, 17048604. Tuesday 12-1pm | Group Member 2 | Johnathan Morey, 17238696. Wednesday 11am-12pm | Group Member 3 | Linda Yi, 17032764. Tuesday 12-1pm | Group Member 4 | Christopher Shepherd, 16673537. Tuesday 9-10am | Unit Name: Statistics for Business Unit Number: 200032 Due Date: Week 13 tutorial Number of Questions: 4 Value: 10% Total Number of Pages: 6 Unit Coordinator: Mr. Neil Hopkins (Parramatta) ------------------------------------------------- ------------------------------------------------- INSTRUCTIONS TO CANDIDATES (1) The file named “Assignment Data Set”, containing the data sets for the following questions, can be downloaded from the e-learning site vUWS. (2) You should use Excel to carry out all calculations and statistical analyses. To get started with Excel, see the instructions on page 13 of the textbook. (3) To complete this assignment, you must provide the Excel outputs for each of the questions in a report. (4) Your assignment submitted must be typed and word-processed. (5) The maximum number of pages for each submission is six (6), not including the cover page. No mark will be given if the number of pages exceeds the limit. (6) The assignment is to be submitted in Week 13 in your tutorial class. (7) Any late assignments...
Words: 1064 - Pages: 5
...Overview From September 3rd, 2015 to October 28th, 2015, our group was given the opportunity to manage an investment portfolio, with the goal of maximizing the value of the portfolio through acquiring, holding, and selling stock. The beginning cash balance of the portfolio was $100,000, and our group had the ability to make up to 500 trades. During this time period, our group made 20 stock purchases and sold stock twice. At the close of business on October 28, 2015, the value of our group’s portfolio increased from $100,000 to $106,785.33, yielding a return of 6.78% (((106785.33/100,000)-1) x 100)). In comparison to the S&P 500 returned at 7.16% and the Dow Jones having a return of 8.65% (Yahoo). Strategy We attempted to build a diverse portfolio whilst being observant of any news regarding public companies so as to take advantage of any current events that may have impacted a company’s value. Further, rather than being fickle with our stocks, attempting to time the market, and racking up brokerage fees, we mostly stuck to a buy-and-hold approach. Diversification is an important component of creating a profitable investment portfolio, as Markowitz demonstrated mathematically in the 1950s, because it reduces uncertainty. The group focused on making sure we held securities in as many different industry sectors as possible. We were able to diversify into 15 companies across eight different industries: • Auto • Ford (F) Financial • A.I.G. (AIG) • Citigroup (C) ...
Words: 1744 - Pages: 7
...Part Ⅰ Portfolio Overview Holding Period: 09/14/2010 ~ 11/30/2010 76 days Settlement Date: 09/14/2010 Position: 6 of 6 Part Ⅱ Securities Analysis *CN Government Bond 10-year is based on CNY. CNY per USD=6.74690 as of 09/14/10; CNY per USD=6.66730 as of 11/30/10 CNY per USD=6.64110 as of 10/15/10 1. CN Government Bond 10-Year The yield and price were relatively stable during the first 30 days of my holding period until Oct. 19th when the People’s Bank of China increased its benchmark rate by 0.25 percentage point on in order to take control of the stubborn inflation. The yield increased and the price fell. However Chinese RMB has been appreciating from 6.74590 USD/CNY to 6.66730 USD/CNY during my holding period. The foreign exchange gains partially offset the loss of market value of the bond. The rate of return is 1.269%. I will sell the bond because the Chinese government has potential to continuously increase the interest rate and besides the US dollar shows a strong appreciation trend recently. 2. US. Government Bond 10-Year There are several factors contributed to the fluctuation of the price and yield of Treasury. In early September, the interest rate for 2-7 year treasury notes have declined to record low level, causing the market value of the portfolio increased. The decline of the price of Treasuries at the end of September is due to profit-taking after recent gains. The yield surged and the price decreased after Fed announcement of QEⅡ. I considered...
Words: 405 - Pages: 2
...KIKI NINDYA ASIH AND NICKO ALBART DMB 10 ABSTRACT This article attempts to measure performance of three stock-based mutual funds in Indonesia over the period of January 1, 2015 – July 30, 2015 using daily data. Each of the stock-based mutual fund was picked randomly from foreign, SOE, and local investment houses. The performance evaluation employs different methods namely Sharpe, Treynor, and Jensen indices. Analysis revealed that different methods yield different result. In order to enrich evaluation, Modigliani-risk adjusted performance metric and qualitative approach were included in the analysis. By using the mix criteria, it was found that the best investment is Schoder 90 Plus Equity Fund followed by Manulife Dana Saham and Mandiri Investa Dynamic Equity. This findings show that even though stock market performed negatively over the period, stock-based mutual fund may yield slightly better than the market. Key Words: Mutual Fund, Sharpe Index, Treynor Index, Jansen Index, M2. I. INTRODUCTION This paper aims at measuring portfolio performance of stock-based mutual funds from three different investment manager over the period of January 1, 2015 – July 30, 2015. Three randomly mutual fund was chosen, namely Schoder 90 Plus Equity Fund (Schroder Investment Management Indonesia), Mandiri Investa Dynamic Equity (Mandiri Manajemen Investasi), and Manulife Dana Saham (Manulife Aset Manajemen Indonesia). In the first step, all mutual funds data evaluated...
Words: 3075 - Pages: 13
