10/31/2008
? Choose Industry
o Describe industry, products, recent performance – also compared to SP500
? Choose 3 firm within industry
o Write a profile about each firm (stock), include any recent news concerning the firms and its recent performance in the stock market; Include any information that may be helpful in determining its future performance
o Get recent performance information
o Get monthly stock returns (last 5 years and get average monthly returns and annual return (12x average monthly return), monthly standard deviation and annual standard deviation ( square root 12 x average monthly) for each of the 3 stocks
o Calculate beta based on average monthly – see Chapter 10
o Put these firms on the CAPM SML line (draw graph)– you must find the market return and the risk free rate
o Create a portfolio with at least 5% weight in your lowest weighting and no more than 95% in your highest weighting (put a % in each of your 3 stocks)
o Calculate expected return (based on your 60 month price data you got above) and portfolio standard deviation
o Put your portfolio on the CAPM SML line you drew above
? Combine your portfolio with the following ETF – an Intermediate Bond Fund
ETF
ISHARES LEH AGG FD AGG on the NYSE
http://finance... displayed 300 characters
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10/31/2008
? Choose Industry
o Describe industry, products, recent performance – also compared to SP500
? Choose 3 firm within industry
o Write a profile about each firm (stock), include any recent news concerning the firms and its recent performance in the stock market; Include any information that may be helpful in determining its future performance
o Get recent performance information
o Get monthly stock returns (last 5 years and get average monthly returns and annual return (12x average monthly return), monthly standard deviation and annual standard deviation ( square root 12 x average monthly) for each of the 3 stocks
o Calculate beta based on average monthly – see Chapter 10
o Put these firms on the CAPM SML line (draw graph)– you must find the market return and the risk free rate
o Create a portfolio with at least 5% weight in your lowest weighting and no more than 95% in your highest weighting (put a % in each of your 3 stocks)
o Calculate expected return (based on your 60 month price data you got above) and portfolio standard deviation
o Put your portfolio on the CAPM SML line you drew above
? Combine your portfolio with the following ETF – an Intermediate Bond Fund
ETF
ISHARES LEH AGG FD AGG on the NYSE
http://finance... displayed 300 characters
