Summary: Your assignment is to construct a portfolio of investment instruments that out-perform the benchmark market index. Snapshot the current quotes of the financial instruments and write up a professional portfolio construction strategy for your portfolio. 1. Identify the types of financial assets that you are going to use for the construction of your professional portfolio. Describe how their characteristics to make them suitable to put into your portfolio. (20 marks) 2. Using Markowitz Portfolio Theory, calculate the expected return and standard deviation of your portfolio. Using Capital Asset Pricing Model (CAPM), calculate the Beta of your portfolio. Using CAPM and Arbitrage Pricing Theory, show how you can arbitrage for Jensens alpha profit. (20 marks) 3. Discuss the market risks involved. Demonstrate how using derivatives, you can manage the risk in your long equity position. Show the payoffs in different market scenarios, identifying the worst case scenario. (20 marks) 4. Discuss the assumptions and weaknesses of security analysis. (20 marks) 5. Discuss technical analysis, illustrating a state-of-the-art technology using internet one latest trading instrument. (20 marks)