Manning School of Business; Investments and Portfolio Analysis

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TERM PROJECT Part IV (4.25 points)
Overall Objective: To familiarize students with information gathering
as well as qualitative and quantitative decision making.
Part IV.1A: 0.0 points
Please recall the information you gathered about your RANDOM STOCK
in the Week2 DB Activity. No further action is required in this section of
the Week8 DB Activity.
Part IV.1B: 0.5 points

1. Go to the Bloomberg site (or an alternate site such as the
   Yahoo site) and look up the Share Price history for your
   RANDOM STOCK. Which site(s) did you use?
2. Use the tabular formats discussed in notes for displaying the
   data and results for calculations.
3. Now review the notes and text and calculate the “1-month
   ‘capital gains’ return in %,” “1-month ‘current income’ return
   in %,” and “1-month ‘total’ return in %,” for your RANDOM
   STOCK using the monthly closing prices of 03/01/20 and
   02/01/20 as your ‘selling price’ and ‘buying price’ respectively
   for the 1st sub-period (February 2020). Were there any dividend
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   declarations? Were there any quantity changes? Take into
   account the quantity changes in your calculations. Use the
   monthly price data etc.
4. Repeat the above for the sub-periods 2 to 6 (January 2020,
   December 2019, November 2019, October 2019 and September
   2019).
5. Use the sub-period returns to calculate the average return
   (Ravg) for your RANDOM STOCK.
6. What is the risk (standard deviation) for your RANDOM STOCK?
7. What is the relative risk (co-efficient of variation) for your RANDOM
   STOCK?
8. What is your overall impression based on the above numbers?
   Would you invest in the RANDOM STOCK?
9. Do you have the “Midas” touch (i.e. are you lucky enough to be
   making money based on the above average return)?
   Part IV.2A: 0.5 points
10. What is your FIRST CHOSEN STOCK?
11. What are your preliminary reasons for this choice?
12. Let us do a reality check: Go to various sites, such as
    Bloomberg, “finance.yahoo.com,” Fortune etc. and look up the
    qualitative information available related to your FIRST CHOSEN
    STOCK. Which sites were used?
13. What kind of product(s) does the company make?
14. Who are some of the prominent members of the Board of
    Directors of the company?
15. Who are some of the prominent shareholders of the company?
16. What do you observe about the sales trend(s)?
17. What do you observe about the current and future market(s) for
    the company’s products?
18. Who are the main competitors?
19. What do you observe about the earnings and profitability
    trend(s)?
20. Are there any other factors that you would like to consider?
21. What is your overall impression about the company and its future
    prospects based on the above qualitative information?
22. Would you still invest in this asset?
23. Why?
24. List at least 3 citations (from different sources). Attach copies of
    the articles associated with the citations.
    Part IV.2B: 0.5 points
25. Go to the Bloomberg site (or an alternate site such as the
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    Yahoo site) and look up the Share Price history for your FIRST
    CHOSEN STOCK. Which site(s) did you use?
26. Use the tabular formats discussed in notes for displaying the
    data and results for calculations.
27. Now review the notes and text and calculate the “1-month
    ‘capital gains’ return in %,” “1-month ‘current income’ return
    in %,” and “1-month ‘total’ return in %,” for your FIRST
    CHOSEN STOCK using the monthly closing prices of 03/01/20
    and 02/01/20 as your ‘selling price’ and ‘buying price’
    respectively for the 1st sub-period (February 2020). Were there
    any dividend declarations? Were there any quantity changes?
    Take into account the quantity changes in your calculations.
    Use the monthly price data etc.
28. Repeat the above for the sub-periods 2 to 6 (January 2020,
    December 2019, November 2019, October 2019 and September
    2019).
29. Use the sub-period returns to calculate the average return
    (Ravg) for your FIRST CHOSEN STOCK.
30. What is the risk (standard deviation) for your FIRST CHOSEN
    STOCK?
31. What is the relative risk (co-efficient of variation) for your FIRST
    CHOSEN STOCK?
32. What is your overall impression based on the above numbers?
    Would you invest in the FIRST CHOSEN STOCK?
33. Do you have the “Midas” touch (i.e. are you lucky enough to be
    making money based on the above average return)?
    Part IV.3A: 0.5 points
34. What is your SECOND CHOSEN STOCK?
35. What are your preliminary reasons for this choice?
36. Let us do a reality check: Go to various sites, such as
    Bloomberg, “finance.yahoo.com,” Fortune etc. and look up the
    qualitative information available related to your SECOND
    CHOSEN STOCK. Which sites were used?
37. What kind of product(s) does the company make?
38. Who are some of the prominent members of the Board of
    Directors of the company?
39. Who are some of the prominent shareholders of the company?
40. What do you observe about the sales trend(s)?
41. What do you observe about the current and future market(s) for
    the company’s products?
42. Who are the main competitors?
43. What do you observe about the earnings and profitability
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    trend(s)?
44. Are there any other factors that you would like to consider?
45. What is your overall impression about the company and its future
    prospects based on the above qualitative information?
46. Would you still invest in this asset?
47. Why?
48. List at least 3 citations (from different sources). Attach copies of
    the articles associated with the citations.
    Part IV.3B: 0.5 points
49. Go to the Bloomberg site (or an alternate site such as the
    Yahoo site) and look up the Share Price history for your
    SECOND CHOSEN STOCK. Which site(s) did you use?
50. Use the tabular formats discussed in notes for displaying the
    data and results for calculations.
51. Now review the notes and text and calculate the “1-month
    ‘capital gains’ return in %,” “1-month ‘current income’ return
    in %,” and “1-month ‘total’ return in %,” for your SECOND
    CHOSEN STOCK using the monthly closing prices of 03/01/20
    and 02/01/20 as your ‘selling price’ and ‘buying price’
    respectively for the 1st sub-period (February 2020). Were there
    any dividend declarations? Were there any quantity changes?
    Take into account the quantity changes in your calculations.
    Use the monthly price data etc.
52. Repeat the above for the sub-periods 2 to 6 (January 2020,
    December 2019, November 2019, October 2019 and September
    2019).
53. Use the sub-period returns to calculate the average return
    (Ravg) for your SECOND CHOSEN STOCK.
54. What is the risk (standard deviation) for your SECOND CHOSEN
    STOCK?
55. What is the relative risk (co-efficient of variation) for your SECOND
    CHOSEN STOCK?
56. What is your overall impression based on the above numbers?
    Would you invest in the SECOND CHOSEN STOCK?
57. Do you have the “Midas” touch (i.e. are you lucky enough to be
    making money based on the above average return)?
    Part IV.4A: 0.5 points
58. What is your THIRD CHOSEN STOCK?
59. What are your preliminary reasons for this choice?
60. Let us do a reality check: Go to various sites, such as
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    Bloomberg, “finance.yahoo.com,” Fortune etc. and look up the
    qualitative information available related to your THIRD CHOSEN
    STOCK. Which sites were used?
61. What kind of product(s) does the company make?
62. Who are some of the prominent members of the Board of
    Directors of the company?
63. Who are some of the prominent shareholders of the company?
64. What do you observe about the sales trend(s)?
65. What do you observe about the current and future market(s) for
    the company’s products?
66. Who are the main competitors?
67. What do you observe about the earnings and profitability
    trend(s)?
68. Are there any other factors that you would like to consider?
69. What is your overall impression about the company and its future
    prospects based on the above qualitative information?
70. Would you still invest in this asset?
71. Why?
72. List at least 3 citations (from different sources). Attach copies of
    the articles associated with the citations.
    Part IV.4B: 0.5 points
73. Go to the Bloomberg site (or an alternate site such as the
    Yahoo site) and look up the Share Price history for your THIRD
    CHOSEN STOCK. Which site(s) did you use?
74. Use the tabular formats discussed in notes for displaying the
    data and results for calculations.
75. Now review the notes and text and calculate the “1-month
    ‘capital gains’ return in %,” “1-month ‘current income’ return
    in %,” and “1-month ‘total’ return in %,” for your THIRD
    CHOSEN STOCK using the monthly closing prices of 03/01/20
    and 02/01/20 as your ‘selling price’ and ‘buying price’
    respectively for the 1st sub-period (February 2020). Were there
    any dividend declarations? Were there any quantity changes?
    Take into account the quantity changes in your calculations.
    Use the monthly price data etc.
76. Repeat the above for the sub-periods 2 to 6 (January 2020,
    December 2019, November 2019, October 2019 and September
    2019).
77. Use the sub-period returns to calculate the average return
    (Ravg) for your THIRD CHOSEN STOCK.
78. What is the risk (standard deviation) for your THIRD CHOSEN
    STOCK?
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79. What is the relative risk (co-efficient of variation) for your THIRD
    CHOSEN STOCK?
80. What is your overall impression based on the above numbers?
    Would you invest in the THIRD CHOSEN STOCK?
81. Do you have the “Midas” touch (i.e. are you lucky enough to be
    making money based on the above average return)?
    Part IV.5A: 0.25 points
82. What is your CHOSEN NON-STOCK ASSET? You may choose a
    bond, or a market index, or a mutual fund/ETF etc.; or a real
    asset. What are your preliminary reasons for this choice? You
    must make sure that price history is available!
83. Let us do a reality check: Go to various sites, such as
    Bloomberg, “finance.yahoo.com,” Fortune etc. and look up the
    qualitative information available related to your CHOSEN NONSTOCK ASSET. Find at least 2 alternate sources of information
    where price history is available (at least on a monthly basis).
    What are they?
84. What are the qualitative or other factors that you would like to
    consider?
85. What is your overall impression about the CHOSEN NON-STOCK
    ASSET and its future prospects based on the above qualitative
    information?
86. Would you still invest in this asset?
87. Why?
88. List at least 3 citations (from different sources). Attach copies of
    the articles associated with the citations.
    Part IV.5B: 0.5 points
89. Go to the one of the sites and look up the Share Price history
    for your CHOSEN NON-STOCK ASSET. Which site(s) did you
    use?
90. Use the tabular formats discussed in notes for displaying the
    data and results for calculations.
91. Now review the notes and text and calculate the “1-month
    ‘capital gains’ return in %,” “1-month ‘current income’ return
    in %,” and “1-month ‘total’ return in %,” for your CHOSEN
    NON-STOCK ASSET using the monthly closing prices of
    03/01/20 and 02/01/20 as your ‘selling price’ and ‘buying
    price’ respectively for the 1st sub-period (February 2020). Were
    there any dividend declarations? Were there any quantity
    changes? Take into account the quantity changes in your
    calculations. Use the monthly price data etc.
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92. Repeat the above for the sub-periods 2 to 6 (January 2020,
    December 2019, November 2019, October 2019 and
    September 2019).
93. Use the sub-period returns to calculate the average return
    (Ravg) for your CHOSEN NON-STOCK ASSET.
94. What is the risk (standard deviation) for your CHOSEN NONSTOCK ASSET?
95. What is the relative risk (co-efficient of variation) for your
    CHOSEN NON-STOCK ASSET?
96. What is your overall impression based on the above numbers?
    Would you invest in the CHOSEN NON-STOCK ASSET?
97. Do you have the “Midas” touch (i.e. are you lucky enough to
    be making money based on the above average return)?
    General Guidelines:
98. Please post your responses on the discussion board directly (NOT
    as an attachment).
99. Participants must create a thread and post their response in
    order to view other threads in this forum.
100. Posting as an attachment will lead to a partial loss of points!
101. The attachments are restricted to supporting copies of
     articles, supporting data and tables etc. as applicable.
102. You will lose points if you do not address each and every point
     given in the guidelines above!
103. Expanded answers sharing your experiences, specially
     ‘investing,’ are encouraged! Go by the ‘spirit’ and not just the
     ‘letter’ of the guidelines!!
104. Writing beyond ‘the call of duty’ is appreciated and could be
     rewarded with ‘bonus points’ at the instructor’s discretion!!!
105. You should have 2 tables for each of these assets (2 x 4 assets =
     8 tables). The first will show the raw data and the calculations
     for the sub-period returns. The second table will use these subperiod returns to calculate the average return, variance,
     standard deviation and the coefficient of variation. You can use
     the tabular examples from the class notes to create these tables.
     Using ‘landscape’ orientation works better than ‘portrait’
     orientation!
106. You can put the answers to the questions in one document and
     the tables in a separate document if you like!
107. Your calculations must be done using a calculator as I
     want you to get plenty of practice for the final exams. Using
     a program like Excel will cause you to loose points! You must
     calculate Rcg and Rci as well as R. We will use that
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     information in DB9 next week!!
     Due dates
     Your posts to week 8’s DB activity must be done by Sunday 11.59 PM
     ET (USA) of week 8 viz. 7/12. If you do not post your response on
     time, you will earn a zero as your DB credit for the week. It is possible
     to earn partial credit based on the parts submitted on time.
     Points
     This is a graded assignment worth up to 4.25 points overall.
     A rough guideline to earning every 0.5 points is to write “Your
     answers” using a minimum of 3/4 page to 1 page or more (excluding
     the ‘cut and paste’ of the guidelines). You can use Word, Verdana, 12
     pt. or use Word, Times New Roman, 12 pt.
     Format Guidelines: Please follow the example given below (you can ‘cut
     and paste’ the questions from the instructions and use ‘italics’ for your
     response) – EXAMPLE:
     Part IV.1B: 0.5 points
108. Go to the Bloomberg site (or an alternate site such as the
     Yahoo site) and look up the Share Price history for your
     RANDOM STOCK. Which site(s) did you use?
     Your answer here.
109. Use the tabular formats discussed in notes for displaying the
     data and results for calculations.
     Your answer here:
     Please see attached Table 1B-1 Random stock sub-period returns.
     Please see attached Table 1B-2 Random stock Return and Risk
110. Now review the notes and text and calculate the “1-month
     ‘capital gains’ return in %,” “1-month ‘current income’ return
     in %,” and “1-month ‘total’ return in %,” for your RANDOM
     STOCK using the monthly closing prices of 03/01/20 and
     02/01/20 as your ‘selling price’ and ‘buying price’ respectively
     for the 1st sub-period (February 2020). Were there any dividend
     declarations? Were there any quantity changes?

Sample Solution

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