Question
Objective: To equip students to create portfolios based on Quantitative Analysis or Qualitative Analysis or a combination of both. Task: Creation of following three portfolios
Objective: To equip students to create portfolios based on Quantitative
Analysis or Qualitative Analysis or a combination of both.
Task: Creation of following three portfolios and back test the data for the last ten
years
1) Portfolio based only on top ten stocks based on your brand preference
alone from the list of brands you have identified in your home (Call this
portfolio SP)
2) Portfolio based only on top ten stocks based on your family members
brand preference alone from the list of brands you have identified in your
home (Call this portfolio FP)
3) Portfolio of ten stocks based on stock analysis alone from the list of
brands you have identified in your home (Call this portfolio SPA)
Steps: You may follow the following steps:
1) Identify various brands in your home and create a list of the brands
2) Find out the companies that are manufacturing these brand
3) Select only the Indian listed companies
4) Select only those companies that are available during 1st April 2009 to 31st
March 2019.
5) Select top 10 companies based on your highest brand preferences. For
ranking purpose you may use a 10 point scale where 1 means most
preferred and 10 means least preferred. This step will give list of 10 stocks
in portfolio SP
6) Select top 10 companies based on your family members highest brand
preferences. Please ensure that brand preferences of all members in your
family are adequately represented in the portfolio of 10 stocks. For ranking
purpose you may use a 10 point scale where 1 means most preferred and
10 means least preferred. This step will give list of 10 stocks in portfolio
FP
7) After step 4, select a portfolio of 10 stocks only based on financial analysis
alone. There is no need to consider brand preferences here. This step will
give list of 10 stocks in portfolio SPA. Generally, you need to follow a
numbers and narratives based approach for performing the financial
analysis. The following pointers may be helpful:
A) Details to the company(management, products, market share,
business mix, key financials, key competitors)
B) Compare relevant parameters across time(8-10 years) and across
peers
C) Analyse the business model of the company(you may use insights from
strategy courses; for example, SWOT analysis, Porter's analysis etc.)
D) Select only those firms with good future growth prospects of the
company
8) You can download the closing price from the list of 10 stocks in portfolios
SP, FP, and SPA during 1st April 2009 to 31st March 2019 using the
following link:
https://www.bseindia.com/markets/equity/EQReports/StockPrcHistori.aspx
?flag=0
9) Assume that you have Rs 1 Lakh invested in each of the stock on 1st April,
2009 based on closing price on that day. You get the number of stock you
have purchased. Assume that you can own stocks in fractions.
10) Calculate the portfolio value every day during 1st April 2009 to 31st March
2019 for portfolios SP, FP and FPA
11) Compare the performance of portfolios SP, FP and SPA when compared
with benchmark index SENSEX returns during the same time period.
SENSEX closing price can be downloaded from the following link:
https://www.bseindia.com/Indices/IndexArchiveData.html
12) Plot a graph comparing the performance of SP, FP, SPA and SENSEX
during https://www.bseindia.com/Indices/IndexArchiveData.html
Key deliverables:
The report should be a excel file that contain the following information. You can
furnish the information sheet wise. 1 means sheet 1
1) List of brands identified in your home
2) List of companies manufacturing those brands
3) List of Indian companies that are listed in India and available during 1st
April 2009 to 31st March 2019
4) List of 10 stocks in portfolio SP with the ranking given by you to various
brands
5) List of 10 stocks in portfolio FP with the ranking given by your family
members to various brands
6) List of 10 stocks in portfolio SPA based on financial analysis. You can
supplement this sheet with a power point presentation that contains the
selection criteria/elimination criteria used for selection of the 10 stocks.
7) Details of portfolios SP, FP and SPA during 1st April 2009 to 31st March
2019. This should contain daily performance of the portfolio during the
period by assuming that Rs 1 lakh each is invested in each of the 10
stocks for three portfolios on 1st April 2009. Assume that you can own
stocks in fractions.
8) Overall and year wise returns of portfolios SP, FP and SPA benchmarked
with SENSEX during 1st April 2009 to 31st March 2019
In short, two deliverables are there
1) Excel sheet with 8 sheets
2) Power point presentation that supplements sheet no.6
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