I need help completing this project. i am only required to complete just one major firm in the us for the portfolio. The instructions for the project is below

1.Identify the three or four major firms in the industry.

2.Identify the top three products produced/services provided and determine the industry's two-digit, three-digit, or four-digit SIC/NAICS code, as convenient. This site might help: http://siccode.com/en/pages/industry-codes.

3.Determine two key future performance indicators for your industry. (For example, in the computer hardware industry, IT spending by corporations and PC shipment forecasts are significant indicators of future industry performance.)

4.Identify two key drivers of an individual firm's success in your industry. (Depending on the industry aterials.)

5.Determine average financial performance measures in your industryD/(E+D), EBIT/Interest, ROA, ROE, P/E, Dividend Yield, and Dividend Payout Ratioand include other measures important in your industry, as appropriate. (For example, in the computer hardware industry, gross profit margin is a critical measure of profitability.)

One good source of such information is Standard & Poor's industry surveys, trends, and projections. Additionally, information available at S&P Capital IQ is helpful. Access is available electronically through the University of Miami library system: Standard and Poor's Capital IQ.

Yahoo Finance has an Industry Center at https://finance.yahoo.com/industries, and BizStats also has information at http://www.bizstats.com/. In addition, see the information sources listed at the end of Section II, as several of those websites also have industry information and links.

Required:

The team should succinctly summarize the findings for each industry by completing Table 1: Industry Summary. Table 1: Industry Summary of your Group Project should be completed by Saturday, Week 3.

Table 1 can be found in the Group Project Excel Spreadsheet under the Table 1: Industry Summary tab (see illustration below).

II. Firm Characteristics and Stock Selection

Week 4 Activities

From the industry information compiled by each group member, the group should select one stock from each industry. Please note:

You should not select international stocks, i.e., stocks of firms not headquartered in the U.S.

You should not use closed-end funds, real estate investment trusts (REITS), or ETFs for the stock selection; and

You should not use firms that went public recently (they should have been publicly traded for more than 5 years) and for which there is not enough historical data.

For each stock:

1. Identify the company's ticker symbol.
2. Determine the financial performance measures for the company (identified in Section I, Point 5).
3. Provide the latest consensus analyst recommendation for the stock.
4. Provide your assessment of the company with respect to financial performance measures (low, average, high).

A good source of firm performance/financial ratios is Yahoo Finance http://finance.yahoo.com/. Discussion of firm operations and strategy are often discussed in the financial press (The Wall Street Journal and Financial Times) and in annual reports, 10Ks, and other Securities and Exchange Commission filings. SEC filings are available at http://www.sec.gov/edgar/searchedgar/companysearch.html. Yahoo Finance also provides information on firms, including press releases, SEC filings, competitors, etc. In addition, S&P Capital IQ (discussed in Section I) provides comparative company analysis by industry.

Analyst recommendations are available at http://www.nasdaq.com/quotes/analyst-recommendations.aspx, and descriptions of the meaning of their recommendations by broker/dealer are available at http://www.marketwatch.com/tools/guide.asp. Yahoo Finance (http://finance.yahoo.com/) provides detailed information on analyst coverage as well. Analyst reports are an excellent source of estimates of forward-looking financial performance measures.

Required:

The team should succinctly summarize its findings for each firm by completing Table 2: Firm Characteristics. Table 2: Firm Characteristics of your Group Project should be completed by Saturday, Week 3.

Table 2 can be found in the Group Project Excel Spreadsheet under the Table 2 Firm Characteristics tab (see illustration below).

III. Portfolio Construction: Portfolio Weights

Week 5 Activities

Imagine you have $500,000 to invest and you construct a portfolio of one stock from one of the industries chosen by each member. First, compute the historical average return and the standard deviation of each stock. Also, compute the correlation between the four stock returns of each firm. Tabulate these descriptive statistics in Table 3: Summary Statistics. Construct the portfolio by choosing the portfolio weights so that you maximize the Sharpe ratio of your portfolio. Tabulate the portfolio weights in Table 4: Portfolio Weights.

Details

• For the project, you will need to compute for each firm its monthly return using monthly adjusted price data. You can obtain the price data from any financial website (e.g., http://finance.yahoo.com). The adjusted prices take into account stock splits, repurchases, and dividend payments. So, the holding period return using adjusted prices is a true measure of the total return.
• To compute the historical returns from the Yahoo Finance price data, please use the adjusted close prices. For example, the return in August 1 should be the adjusted close in August 1 minus the adjusted close in July 1 divided by the adjusted close in July 1. (Note: this is demonstrated in the media program "Solver 1: Getting the Data" found in this week's Learning Materials).
• For each of the stocks, collect at least 5 years of monthly price data. If you want to have a larger sample, collect up to 10 years of monthly price data.
• It is possible that some of your stocks will have a zero weight. This can happen if you have stocks that are positively correlated. In this case, there are few diversification benefits, so Solver will simply overweight the stocks with the highest Sharpe ratio. If you get a zero weight on a stock, you should find a new stock for your portfolio so that all stocks have positive weights. To search for a new stock, you can start looking within the industry from which the zero weight stock came. If you are unable to find a new stock in the given industry, you might have to change industries.
• Tips for identifying stocks with high correlations:
• Large companies that belong to the S&P 500 all follow the market very closely and, thus, have high correlations. If you have more than two or three large companies in your portfolio, chances are one will get a weight of zero.
• Supply and demand chains determine correlation. Firms that share similar supply/demand chains will have high positive correlations even if they are not in the same industry. For example, demand for cruises and theme parks is cyclical because both industries have higher revenues in expansions. So they are positively correlated even if they are in different industries.

Required:

• Post the descriptive statistics in Table 3: Summary Statistics and Table 4: Portfolio Weights in this week's Group Project Discussion area by Wednesday, Week 5.
• By Friday, Week 5, respond to at least one other group's posting that has yet to be responded to and provide additional insight as to the portfolio the group presented. What other information would you suggest might be beneficial for the group?
• Also, submit Table 3 and Table 4 to your faculty for feedback (Note: This should be submitted by the designated group member.)
• Once you receive feedback from your classmates and faculty, incorporate the feedback and make edits as needed.

Table 3: Summary Statistics and Table 4: Portfolio Weights of your Group Project should be completed by Saturday, Week 5.

Table 3 and Table 4 can be found in the Group Project Excel Spreadsheet under the Table 3 Summary Statistics and Table 4 Portfolio Weights tab (see illustration below).

IV. Risk Assessment

Week 6 Activities

Compute the following risk measures for your firm's portfolio:

1.CAPM beta

2.Total risk (or portfolio variance)

3.Systematic risk

4.Idiosyncratic risk using CAPM

5.R-squared of the CAPM regression.

Use monthly returns to compute these risk measures.

Details

• You will estimate the CAPM for your portfolio. For this analysis, download the monthly RMRF factor (the CAPM factor) and the monthly 30-day T-Bill return from the website of Ken French at http://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html#Research. At Ken's website, click on the link Fama/French 3 Factors and open the zip file. (The data are in a notepad version.)

• The returns on the website of Ken French are based on beginning of the month prices. For example, the RMRF for 199607 refers to a monthly return where the portfolio was bought on the first trading day of 199606 and sold on the first trading day of 199607. When you compute the returns of each individual asset, you need to follow the same time convention, that is, the monthly return is the difference between the adjusted close price at the first trading day of a month minus the adjusted close price at the first trading day of the previous month divided by the adjusted close price at the first trading day of the previous month.

• This week is a good time to consider whether you are satisfied with your portfolio. If not, you can change the stocks in the portfolio again and refine it further.

Required:

• Post the risk measures in Table 5: Risk Assessment in this week's Group Project Discussion area by Wednesday, Week 6.
• By Friday, Week 6, respond to at least one other group's posting that has yet to be responded to and provide additional insight as to the results the group presented. What other information would you suggest might be beneficial for the group?
• Once you receive feedback from your classmates, incorporate the feedback and make adjustments as needed.
• As part of your final project submission, you will need to draft a short report summarizing your portfolio. The report should not be more than 2 pages in length. It should briefly summarize the following:

1. What stocks are in the portfolio?
2. What are their correlations?
3. What are the portfolio weights?
4. A description of the CAPM results
5. How well your portfolio did compared to the market

(Note: This week, is a good time to start drafting your group's report.)

Table 5: Risk Assessment of your Group Project should be completed by Saturday, Week 6.

Table 5 can be found in the Group Project Excel Spreadsheet under the Table 5 Risk Assessment tab (see illustration below).

V. Performance Evaluation

Week 7 Activities

Compute the following performance measures for your portfolio:

1.Average historical return

2.Sharpe ratio

3.Relative Sharpe ratio (= Portfolio Sharpe ratio/Market Sharpe ratio, both Sharpe ratios measured over the same sample period)

4.Jensen's alpha

Prepare for Submission:

Tabulate these measures in Table 6: Performance Evaluation. Complete all the tablesand the Group Project reportand submit them by Saturday, Week 7, 11:59 p.m. Eastern Time. (Note: This should be submitted by the designated group member.)

Table 6 can be found in the Group Project Excel Spreadsheet under the Table 6 Performance Evaluation tab (see illustration below).

FOR FINAL SUBMISSION OF PROJECT:

Please submit 2 documents: a Word file for your report of your project and an Excel file that has your calculations and tables.

To submit, go your group project page, find the link "Group Assignments, Week 7 Group ??? Project." Follow the link to a new page that explains how to upload the project.

Your report for the project should be 2-3 pages long. To help you with the report, here are some important topics to discuss:

aFirst, provide a description of your portfolio. That is, talk about the rational/thinking behind your portfolio and provide a short description of the stocks included. This analysis should be based on the information in Tables 1 and 2.

bSecond, describe your portfolio weights by referring to Tables 3 and Table 4.

cThird, talk about the risk in the portfolio (Table 5) and the performance of your portfolio based on the measures in Table 6

dFinally, conclude on whether you think you have a good portfolio.

eNOTE 1: When you are discussing the tables in the report, you can copy paste your tables from Excel to Word.

fNOTE 2: Keep in mind that the above 4 topics are always important when we are describing any portfolio.