Notes On Investment Policy And Portfolio Development

This was a simulation project related to application of different tools of portfolio management. The project was applied by using stocktrak.com platform. This website provides the students and teachers with a real time simulation platform for learning the portfolio investment. A specific allocated amount was used in this simulation project for portfolio investment. A portfolio was created of different securities like stocks, bonds and currencies. These bonds and securities were from different sectors of economy like technology industry, financial industry, consumer goods industry, services industry, health industry, industrial goods industry, utilities industry, and basic materials industry. The top performing stocks in this simulation project were Bank of America Corporation, Hersha Hospitality trust, Deans Food Company, Loews Corporation, and Pepsi Co Inc. The study also found that the percentage return on portfolio remained above the return realized on Dow Jones ETF during the timeline of the project.

market, and the S&P GSCI All metals, which measures the performance of investment in precious and industrial metals. The weight of 90% is given to the Russell 3000 index because we believe that our portfolio represents the U.S. market. Typically, we invest approximately 30% of the total assets each in large-cap stocks, mid-cap stocks, and small-cap stocks. The weight of 10% is given to the S&P GSCI All metals because, on average, we take a position in futures contracts that are worth up to 10% of the total assets.

b. Available-for-sale securities. Investments in debt securities that are classified as available for sale and equity securities

First, after selecting various assets and determining their monthly prices, the assets’ return is calculated. Asset return is the monthly percentage increase of the asset. Next, the expected return of the portfolio is needed. It is calculated as the weighted average of expected returns of the individual assets within the portfolio. Thereafter it is necessary to define and distinguish between correlation and covariance. Correlation is the measure of how two assets interact with one another, and it can vary between -1 and 1. A correlation of 1 indicates that the two

A 401(k) plan is a retirement account to which employee and employers contribute, on which taxes are deferred until withdrawal, and for which the employee selects the types of investments. As with anything to do with the Internal Revenue Service, the 401(k) plan has many ups and downs and many regulations that must be followed. This makes things more difficult for both the employer and employee in making decisions about the plan. We have taken a look at the advantages and disadvantages of the plan from both sides of the table to show what all is involved in deciding to use a 401(k) plan.

The project is based on analyzing the 40 scrip’s and preparing a portfolio of 20 scrip’s and evaluates the performance of portfolio for the next one year. The sample size is 40 companies stocks. The company stocks are chosen based on their nature 1) Aggressive in nature (β>1).2) Conservative in nature (β<1) and 3).Balanced in nature (β=1).The portfolio performance is compared with various mutual funds and with market to pullout or adds some companies according to their performances. The virtual money investing in the portfolio is 100 Crores.

The market portfolio consisted of 8 asset classes 1 , in which we used an adjusted allocation size based

UNIVERSITY OF ILLINOIS AT CHICAGO Liautaud Graduate School of Business Department of Finance Professor Hsiu-lang Chen 1 Practice Problem I

1.High Color Detergent is issuing new shares of stock which will trade on NASDAQ. If Sue purchases 300 of these shares, the trade will occur in which one of the following markets? Primary 2. Wilson just placed an order with his broker to purchase 500 of the outstanding shares of GE. This purchase will occur in which one of the following markets? Secondary 3.Hi-Tek Shoes is a private firm that has decided to issue shares of stock to the general public. This stock issue will be referred to as a(n): initial public offering4. A firm that specializes in arranging financing for companies is called a(n): investment banking firm5.The process of purchasing newly issued shares from the issuer and reselling those shares to the general public is

Investing in stocks and mutual funds isn't as difficult or as complicated as many people imagine. These simple investment tools can help anyone secure and grow their wealth through ownership stakes in specific companies (in the case of stocks) or through ownership of groups of companies identified, selected, and managed by investment firms and professionals (in the case of mutual funds). Not all investment tools are so straightforward, however, and in fact not all forms of stock ownership or stock trading are this simple, either. These other tools can also be highly advantageous to investors both large and small, but only if they are properly understood and carefully utilized, and only by some investors.

Much of the work we do is focused on helping individual investors find just the right combinations of assets and forms of investment ownership (IRAs, taxable accounts and the like) to meet their individual needs. Since everybody’s financial

Jean is investing in an EIS diversified funds which will spread her asset across several assets backed companies.

According to the CAPM model:R_i=α+βR_m+ε, α represent the abnormal return gained by the portfolio. If the market is efficiency, the α has to be zero.

Never put all your retirement assets into one basket. Putting all your savings into one form of investment heightens the risk of losing all your money and may reduce your return on investment. Asset allocation is an integral part of managing your retirement assets. Appropriate asset allocation requires a number of factors such;

So the investor will invest 32.58860806% of the investment budget in the risky asset and 67.41139194% in the risk-free asset.