Case Study (FIN-300): Portfolio with target beta

Category : Archieve

Case Study (FIN-300): Portfolio with target beta

Educational purposes only…

PLEASE NOTE: You need a new username for this case study.

Purpose

  • Form a financial securities portfolio with a target beta
  • Review and apply the capital asset pricing theory
  • Conduct a detailed research about financial securities as well as financial markets
  •  

    Rules

  • Trading Game is used for the portfolio formations.
  • 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.
  • You need to obtain the Betas for this assignment. Please use the Betas that are provided by Yahoo! Finance. If Beta is not available on Yahoo! Finance, please do not use that security.
  • You can only trade stocks (no ETFs, ADRs etc.)
  • You can only have long positions (no short positions)
  • You need to have balanced weights across your stocks
  • 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.
  •  

    Directions:

  • Maximum allowed funds (based on cost) for the stocks is $250,000. No partial credit is given if portfolio value is more than $250,000.
  • Minimum allowed funds (based on cost) for the stocks is $240,000. No partial credit is given if portfolio value is less than $240,000.
  • There needs to be at least 20 different stocks in your portfolio. No partial credit is given if portfolio contains less than 20 stocks.
  • Weighted portfolio Beta needs to be as close to 1 (one) as possible. Partial credit is given for portfolio betas that are not exactly 1.
  • Grading:

    THIS ASSIGNMENT IS COMPLETELY VOLUNTARY.
    THIS ASSIGNMENT IS NOT PART OF OUR REQUIRED COURSE CONTENT.
    This assignment has a total of 100 points. 10% 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 10 points to any ONE of your exams.
    For instance #2: Let’s assume you received 80 on this assignment. Then, you can add 8 points to any ONE of your exams.
    For instance #3: Let’s assume you received 60 on this assignment. Then, you can add 6 points to any ONE of your exams.