Case Study (FIN-325): International Portfolio Management

Category : Archieve

Case Study (FIN-325): International Portfolio Management

Educational purposes only…

Purpose

  • To review and apply the calculations provided with the textbook material to real life examples,
  • To form a diversified international financial securities portfolio,
  • To review and apply the theory of international diversification and hedging,
  • To conduct a detailed research about international financial securities as well as international financial markets.
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    Rules

  • Trading Game is used for the portfolio formations.
  • You need to use one username for the entire case study (i.e. same username for all three sections/portfolios).
  • Your username for this case study must be unique to this case study (i.e. you cannot use a username you already had for other case studies).
  • Please note that the Trading Game uses Yahoo! Finance for all financial figures, financial statements, historical prices, beta, symbols, ticker codes, fund categories, ETF categories, options, futures, commodities, security names, countries and all other information pertaining to this case study.
  • If you submit this case study before the deadline AND you receive a grade of C or better then you can resubmit this case study for a second time (with a new username). There is no third resubmission.
  • You need to have a new username for the second submission.
  • Once you trade a security, it is reserved. It cannot be traded by anybody else.
  • You need to let me know when you are done so that I can grade your work.
  • All work will be graded immediately after the deadline. Trading Game will not allow you to trade after the deadline.
  • You can use Stata (completely voluntary) to trade or check your work.
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    Directions: Long Stock Positions

  • (5 points) Maximum allowed funds (based on cost) for the long positions is $250,000.
  • (5 points) Minimum allowed funds (based on cost) for the long positions is $240,000.
  • Please include stocks in each of the following currencies;
    • EUR: at least 2 different stocks (2 points).
    • GBP: at least 2 different stocks (2 points).
    • CHF: at least 2 different stocks (2 points).
    • CAD: at least 2 different stocks (2 points).
    • MXN: at least 2 different stocks (2 points).
    • AUD: at least 2 different stocks (2 points).
    • CNY: at least 2 different stocks (2 points).
    • SEK: at least 2 different stocks (2 points).
    • RUB: at least 2 different stocks (2 points).
    • NZD: at least 2 different stocks (2 points).
    • SGD: at least 2 different stocks (2 points).
    • MYR: at least 2 different stocks (2 points).
    • ILS: at least 2 different stocks (2 points).
    • IDR: at least 2 different stocks (2 points).
  • For the following 5 currencies, please make sure that you have at least $10,000 worth of foreign currency exposure and appropriate amount of hedging. Please note that cost of options is not considered as loss. Also, cost of options are not part of your total portfolio value.
    • EUR: at least $10,000 worth of foreign currency exposure (1 point) appropriate amount of hedging (5 points).
    • GBP: at least $10,000 worth of foreign currency exposure (1 point) appropriate amount of hedging (5 points).
    • CHF: at least $10,000 worth of foreign currency exposure (1 point) appropriate amount of hedging (5 points).
    • CAD: at least $10,000 worth of foreign currency exposure (1 point) appropriate amount of hedging (5 points).
    • AUD: at least $10,000 worth of foreign currency exposure (1 point) appropriate amount of hedging (5 points).

     

    Directions: Short Stock Positions

  • Stocks for the short positions must be different than those for long positions.
  • (5 points) Maximum allowed funds (based on cost) for the short positions is $250,000.
  • (5 points) Minimum allowed funds (based on cost) for the short positions is $240,000.
  • Please include stocks in each of the following currencies;
    • EUR: at least 2 different stocks (2 points).
    • GBP: at least 2 different stocks (2 points).
    • CHF: at least 2 different stocks (2 points).
    • CAD: at least 2 different stocks (2 points).
    • MXN: at least 2 different stocks (2 points).
    • AUD: at least 2 different stocks (2 points).
    • CNY: at least 2 different stocks (2 points).
    • SEK: at least 2 different stocks (2 points).
    • RUB: at least 2 different stocks (2 points).
    • NZD: at least 2 different stocks (2 points).
    • SGD: at least 2 different stocks (2 points).
    • MYR: at least 2 different stocks (2 points).
    • ILS: at least 2 different stocks (2 points).
    • IDR: at least 2 different stocks (2 points).
  • For the following 5 currencies, please make sure that you have at least $10,000 worth of foreign currency exposure and appropriate amount of hedging. Please note that cost of options is not considered as loss. Also, cost of options are not part of your total portfolio value.
    • EUR: at least $10,000 worth of foreign currency exposure (1 point) appropriate amount of hedging (5 points).
    • GBP: at least $10,000 worth of foreign currency exposure (1 point) appropriate amount of hedging (5 points).
    • CHF: at least $10,000 worth of foreign currency exposure (1 point) appropriate amount of hedging (5 points).
    • CAD: at least $10,000 worth of foreign currency exposure (1 point) appropriate amount of hedging (5 points).
    • AUD: at least $10,000 worth of foreign currency exposure (1 point) appropriate amount of hedging (5 points).

    Grading:

    THIS ASSIGNMENT IS COMPLETELY VOLUNTARY.
    THIS ASSIGNMENT IS NOT PART OF OUR REQUIRED COURSE CONTENT.
    This assignment has a total of 100 points. 15% of these points can be added to any ONE of the exams.
    For instance #1: Let’s assume you received 100 on this assignment. Then, you can add 15 points to any ONE of your exams.
    For instance #2: Let’s assume you received 80 on this assignment. Then, you can add 12 points to any ONE of your exams.
    For instance #3: Let’s assume you received 60 on this assignment. Then, you can add 9 points to any ONE of your exams.