In this part, you need to prepare a business$-$style response to a hypothetical but realistic situation and make recommendations on the proposed stock investment project. You should develop a busines report in a Word file where you present the findings, considerations, recommendations, conclusions, or any other issues relevant to the task.

You have recently started an internship position with Brisbane$-$based Bianchi Asset Management $($BAM$),$ a large asset management company with A$$500$ million Assets Under Management. The company$$s core investment focuses on the domestic share market; however, investments in share markets have provided lower than expected returns in the recent years.

BAM$$s Chief Investment Officer $($CIO$)$ Dr Roger has assigned you a research task to perform an investment appraisal on a portfolio comprising of $5$ companies covered by the S&P$/$ASX$200$ index. You should provide a recommendation on the portfolio based on financial data analytics and consideration of other issues as part of BAM$$s investment.

Your personal values and experiences are important, and you should base your response on the evidence provided in these tasks along with your knowledge gained in your Master of Finance program study. It is important that you provide clear evidence of your ability to apply your knowledge of finance as learned in the course to the task. The CIO has requested that your analysis must be an up$-$to$-$date analysis with the use of monthly data spanning from December $2021$ until March $2024.$ The data sources could be Refinitiv Workspace and Yahoo! Finance. As modern investments not just focus on financial returns$/$risks$,$ you should also take into consideration the corporate governance and ESG issues in company selection.

Your report must address the following issues:

$$ Portfolio construction approach

$$ A brief description of the five companies analyzed

$$ Financial aspects of the portfolio and the consitutents based on data analysis using Python

$$ The corporate governance of the company with lowest ESG score

$$ The ESG performance of the company with lowest ESG score

$$ Potential opportunities and risks associated with the proposed portfolio

Some Guidelines:

Before presenting your investment recommendation report, you need to conduct financial data analytics using Python in Jupyter Notebook.

Python Coding Task:

$1.$ To start the first task, please download the list of ASX$200$ consituent companies from Refinitiv Workspace, and use Python Pandas to import it as a DataFrame $($named as dfASX$).$ Print the dataframe dfASX in a Jupyter Notebook cell.

$2.$ Obtain a list $($named as ASXlist$)$ of tickers of ASX$200$ companies, and print the list.

$3.$ Set a seed in a random drawing, with the seed number being your student number. $($For example, if your student number is s$1234567,$ your code will be random.seed$(1234567)).$ Use a random function $($random$.$sample$())$ to sample $20$ stocks from the consitutents, sorted in an alphabetical order. Create another dataframe $($named as dfASX$20)$ to show the RICs $($tickers$)$

and company names $($which can be obtained from dfASX$).$ Print dfASX$20.$

$4.$ Go to Refintiv Workspace, find the ESG score of each of those selected $20$ companies in the most recent year, and construct a dictionary named ESGscore. Then in dfASX$20$ add this dictionary as a new column named 'ESG'. Rank the dfASX$20$ by ESG value in descending order

and print dfASX$20.$

Portfolio Optimization

$5.$ Choose the top $5$ companies in terms of ESG score from dfASX$20,$ and save the dataframe as dfASX$5.$ Print out dfASX$5.$

$6.$ Use yfinance package to obtain the monthly share price data for those $5$ companies from Yahoo! Finance for the period December $2021$ March $2024($named as df$),$ and calculate the monthly returns $($percentage return$)($named as dfr$).$

$7.$ For each stock, normalize the stock price to $$1$ at the beginning of the period. Then visualize the time$-$series movement of the normalized stock prices of those $5$ companies in one graph.

$8.$ Show the summary statistics of the returns of those $5$ stocks. Use the bar plot to visualize the average returns of those $5$ stocks. Show the correlation matrix of the returns of those $5$ stocks.

Visualize the correlations using heatmap.

$9.$ Assume the investor has a quadratic utitily function with the coefficient of the relative risk

aversion $$ of $4*(1+$the last digit of your student ID number$/10)($e$.$g$.,$ if your student ID number

is s$1234567,$ then $416\mathrm{.}8).$ Form a portfolio comprising of those $5$ stocks. $$