This assessment contributes 50% of the overall module assessment.
Description: This coursework aims to provide you with the ability to design, construct and
evaluate Investment portfolios. This is a group assignment (2 students) and where you have
to perform a number of tasks from portfolio formation till portfolio performance
measurement. Your tasks deal with two-stock portfolio construction based on Modern
Portfolio Theory.
Tasks: Using recent data (Sept 2019 – Sept 2020) provided on Bahrain stocks (you can
retrieve the data either from Bloomberg or Bahrain Bourse or from other sources under my
guidance), perform the following tasks before compiling your report (equivalent to 1000
words):
Describe your investor’s profile
Discuss your investment strategy as per your investor’s objectives
Construct a portfolio of three assets according to Modern Portfolio Theory (for sure
you need to calculate the correlation coefficients between stocks) – You can simply
use Excel-Data Analysis
You should come up with calculations of the average returns of each of the assets
over a period of 1 year
You should obtain the betas of each of the assets (use www.investing.com)
You should come up with calculations of the average market returns (using Bahrain
market index BSE) over a period equal your investor’s objectives
Guidance: For your report and presentation, adhere to the following:
- Show your investor’s profile, your strategy, and how you constructed your portfolio
by calculating the portfolio return, portfolio beta, and portfolio standard deviation
[25 marks] - Evaluate all portfolio’s measures of performance: Sharpe Measure, Treynor
Measure, Jensen’s Measure [25 marks] - Analyze your portfolio comparing it with the market portfolio [20 marks]
- Present your work to the class [30 marks] (equivalent to 500 words)
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Assessment and Marks: In a nutshell, here is a snapshot of your assignment marking sheet:
LEARNING OUTCOMES:
On successful completion of this assessment, the student should be
able to:
Understand the investment environment, portfolio construction process and asset allocation
Evaluate the risks and returns of different investment vehicles, and evaluate the investment
portfolio performance