it will require selection of 3 firms with utilities and energy sector/industry analyzed to invest $10,000,000 of a special portfolio into both stocks and bonds evenly. The objective of the portfolio is to produce superior returns to those of the S&P 500 over the next 12 months. Therefore, given the economic environment, the sector sensitivity and performance expected, 3 firms will need to be selected per industry that will outperform their sector.

Requirements In order to meet all the requirements for the financial analysis exercise

you are required to complete the following tasks:

Select stocks and bonds to purchase based on sector and industry analysis

Use 3 methods to calculate relative value of stocks: dividend discount, Gordon model and P/E or other approved method.

Obtain the consensus earnings forecast for the firms

Explain how this will affect the expected future price

Obtain a consensus interest rate forecast

How will this effect bond prices?

How will this affect the roll down the yield curve?