Write a report in which you provide A comparative analysis of the overall performance of both portfolios, including reference to specific share price fluctuations that occurred following events that affected the entire Stock Market or events that affected individual companies.

Financial Management 3rd Assignment

 

Your asset management firm have been approach by a high net worth client who wishes to invest £200,000 in two portfolios of shares. You are a group of Portfolio Managers who have been asked by your senior financial executive to produce a report for this client regarding the performance of your client’s portfolios.

 

You need to set up 2 portfolios using Virtual Trader. Each portfolio will have an initial investment of £100,000 each.

 

Portfolio 1

 

You do not need to consider any particular theory for this portfolio. You can simply invest in companies in which you have an interest or companies that you believe will perform well on the London Stock Exchange over the next few months. It is suggested that you read the financial pages of the newspapers or relevant websites to help you with this task.

 

Portfolio 2

 

For this portfolio you need to use the Capital Asset Pricing Model which can be applied in a number of ways. The choice is yours.

The senior financial executive would like you to include the following in your report, which should be no more than 3,000 words in length:

 

  • A critical analysis of the Capital Asset Pricing Model.
  • A comparative analysis of the overall performance of both portfolios, including reference to specific share price fluctuations that occurred following events that affected the entire Stock Market or events that affected individual companies.
  • Recommendations as to what you would do differently in the future in order to improve the performance of your portfolios.

 

 

Virtual Trader Rules

  1. The website is virtualtrader.co.uk.
  2. You will need to create one account per group. You will be directed to open an account once you click on ‘Create your portfolio Now’ on the front screen.
  3. To create your portfolios select My Portfolios,(under the Portfolios Button at the top of the screen) and then click on the create Virtual Trader Portfolio and then enter a name and description for each portfolio.

You will be given £100,000 for each portfolio.

  1. You can begin trading as soon as you like. You must NOT reset either portfolio before the end of the project. If you reset your portfolio during the project, marks will be deducted from your overall total.
  2. On the website you will need to read:
  3. Investing : The Basics
  4. Strategies
  5. Trader Tricks
  6. Dictionary