You are requested to construct a portfolio consisting of several constituents of the S&P500 (US) or the FTSE100 (UK) or the Euronext (EU) or the Nikke225 (Japanese).

Assume that your initial endowment is equal to $100K and that a 1% transaction fee is applied.

Q1. How many securities are you intending to hold and why? Please provide both a qualitative and a quantitative justification of your choice.

Q2. Which securities are you going to choose and why? Please provide a technical and a fundamental analysis, i.e. consider several fundamentals of the securities (i.e. performance, risk, size, liquidity, etc.) in the construction of your portfolio?

Q3. What is the risk-return profile of your portfolio?

Q4. What is the diversification benefit of your portfolio?

Q5. How could you construct an international portfolio consisting of several of the constituents of the aforementioned stock indices?

In all parts analyzed, you should discuss your findings from the investor's point of view.