You Will Be Making a Report to Your Investment Committee That Discusses and Summarizes

You will be making a report to your investment committee that discusses and summarizes the performance of your stock portfolio (attached). Use closing prices as of 11/18/2013 to calculate your returns. What is the final market value of your portfolio (including dividends received)? If the final market value of your portfolio is less than $100,000, your portfolio lost money. Calculations: Use the 11/18/2013 closing price of your stocks to calculate your returns. You can use Yahoo Finance or Google Finance for assistance. 1. Report the “purchase” and “sale” price of your stocks from the beginning and end of the semester along with any dividends you might have received. Calculate the buy-and-hold return of each stock [(MVend – MVbeginning + DIV) / MVbeginning] and the buy-and-hold return on your portfolio. 2. Determine the final market value of your portfolio (including dividends received). If the final market value of your portfolio is less than $100,000, your investment lost money. 3. Calculate the market value of a. Your portfolio for each day (including cash). I suggest that you do this by adding up the daily closing market values of your assets held and the cash you hold, including the total dividends received up to date. b. The S&P 500 index portfolio over this same period assuming you keep the same amount in cash. We are using the S&P 500 index as our proxy for the market. 4. Plot the daily market value of your portfolio and the daily market value of the S&P 500 using your calculations in #3 5. Using the market values you calculated in #3, calculate the daily returns (percent) for a. your portfolio b. The S&P 500 index portfolio. 6. Using your calculations in #5, calculate a. The average daily return and the standard deviation of daily returns for both the S&P 500 index and your portfolio. b. your portfolio’s beta by calculating the covariance of your portfolio’s daily returns with the S&P 500’s daily returns and dividing that by the variance of the S&P 500. Write-up: Assume that you are preparing a relatively short report (maximum of 5 pages single-spaced) for your investment committee. You will be graded on the quality of your writing as well as the quality of your analysis. Do not simply answer the following questions – this should be financial report! These questions are intended to provide guidance. 1. Introduction 2. Comment on the individual and portfolio returns and on any information/events (market-wide or firm-specific) that may have contributed to the performance of your stocks. Describe and explain any trades you made. (Suggested length: a short, concise paragraph for each stock). 3. From your calculations, if you held the S&P 500 instead of your stocks, how much money would you have ended up with? Would you have been better or worse off to hold the index? Analyze the reasons for any differences. 4. Based on your calculations for standard deviation and beta, how risky was your portfolio compared to the index? Again, analyze the causes of the differences. 5. Finally, what are your plans going forward? That is, if this continued and you had the chance to alter your portfolio holdings now, would you choose to sell any of your stocks or would you want to keep holding them? What will you tell the investment committee? Be explicit. Deliverables: 1. Your report (5 pages single-spaced maximum, 12 pt. font) 2. Spreadsheet of returns and calculations, and market value plot – 2-pages maximum – make it neat and readable. I have attached the stock portfolio and description for assistance; please let me know if there are questions.

Project
1
-
Part
1
I
have
selected
five
companies
stocks
namely
Apple
Inc
(AAPL),
The
Boeing
Company
(BA),
The
Walt
Disney
Company
(DIS),
General
Motors
Company
(GM)
and
Johnson
&
Johnson
(JNJ)
for
the
investment
purpose
considering
different
parameters.
As
I
was
given
for
the
Project
a
total
invested
amount
of
$100,000/-
,
I
considered
the
price
of
the
above
shares
as
on
November
06,
2013
and
have
purchased
the
shares
as
per
the
below
table
and
there
would
be
$10
commission
for
each
transaction
of
purchasing
the
stock.
Ticker
Closing
Symbol
11/06/2013
Stocks
Commission
Total
Cost
Apple
Inc
AAPL
$
520.92
50
$
10.00
$
26,056.00
The
Boeing
Company
BA
$
133.09
100
$
10.00
$
13,319.00
DIS
$
69.00
250
$
10.00
$
17,260.00
Company
GM
$
36.59
300
$
10.00
$
10,987.00
Johnson
&
Johnson
JNJ
$
93.04
300
$
10.00
$
27,922.00
Name
Of
Stock
The
Walt
Disney
Company
General
Price
Number
of
Motors
Total
$
95,544
I
purchased
the
above
stocks
on
November
06,
2013
and
now
I
keep
watching
the
stock
price
movements.
Considering
the
price
for
the
respective
stocks,
the
total
amount
of
stock
investment
is
$95,544
and
the
amount
held
in
cash
is
$4,456.
It
is
very
important
to
pick
the
right
stocks
full
filling
the
investor
requirements
and
while
picking
the
stocks
I
have
used
the
following
parameters:
(i)
Age
of
the
investor
and
risk
taking
capability.
As
an
investor,
I
am
in
my
early
40s
(I
think
still
young
as
many
of
my
family
members
live
into
their
90s)
and
I
can
take
the
risk
of
keeping
my
money
invested
in
the
shares
with
a
decent
return.
I
am
ready
to
take
risks
that
will
achieve
certain
returns
and
larger
market
fluctuation.
So
the
stocks
which
have
a
good
return
track
may
be
selected
and
invested.
So
the
above
mentioned
stocks
are
good
stocks
with
decent
returns
from
the
past
few
years.
(ii)
Decent
Return
being
a
parameter
As
an
investor,
I
am
not
looking
at
the
stocks,
which
are
giving
extraordinary
returns,
but
need
decent
returns,
which
will
help
my
investment
to
grow
slowly
over
the
period
of
time.
Hence
the
stocks
selected
are
considering
the
price
fluctuations
over
the
period
of
time
for
last
two
years.
Hence
any
of
the
stocks,
I
have
selected
do
not
have
drastic
price
fluctuations
over
the
last
few
years.
Hence
I
may
expect
a
decent
recent
from
the
portfolio
over
the
period
of
investment.
(iii)
Capital
Protection
As
an
investor,
I
need
to
have
my
capital
protected
and
then
improve
the
investment.
Therefore
the
stocks
selected
should
have
returns
that
can
protect
the
capital
over
the
period
of
time.
(iv)
Diversified
Portfolio
It
is
very
important
that,
the
investment
made
is
in
diversified
portfolio,
so
that
the
loss
in
one
stock
would
be
adjusted
as
the
gain
in
the
other
stock
leading
to
overall
decent
returns.
Here
I
looked
at
the
industry
performances
and
accordingly
have
picked
up
the
stocks.
I
know
that,
Apple
Inc
is
doing
extremely
well
in
the
industry
to
which
it
pertains
to
and
the
investment
I
have
made
in
Apple
will
fetch
towards
the
capital
protection
along
with
sustainable
return.
Similarly
the
other
stocks
namely
Boeing
Company,
Walt
Disney
Company,
General
Motors
&
Johnson
and
Johnson
are
good
stocks
in
their
respective
industries
and
we
could
observe
they
are
doing
well
over
the
time.
The
basic
idea
is
to
design
a
portfolio
with
decent
returns
along
with
the
stocks,
whose
prices
are
not
very
aggressive
in
nature
and
the
industry
to
which
all
the
stocks
pertained
are
encouraged
in
many
ways.
I
could
see
that,
there
are
many
industry
specific
programs
that
encourage
the
companies
to
do
a
better
business.
(v)
Business
Model
along
with
Management
team
of
each
company
I
have
tried
to
understand
the
business
model
of
each
company
and
the
products
and
services
rendered
by
each
company.
I
also
tried
to
find
out
how
the
company
is
managed
by
the
management
team
and
how
experienced
are
the
management
teams.
A
good,
professional
and
high
integrity
leader
can
lead
the
company
to
greater
heights.
I
could
observe
that
all
the
companys
where
I
am
planning
for
our
investment
has
good
leaders
to
lead
the
company.
(vi)
Fundamental
Analysis
I
looked
at
the
fundamental
analysis
of
each
company
and
could
convince
myself,
that
each
company
has
a
strong
fundamentals
position.
Fundamental
Analysis
is
based
on
the
premises
that
a
security
has
an
intrinsic
value
at
any,
given
time.
This
value
is
a
function
of
underlying
economic
values
specifically,
expected
returns
and
risk.
By
assessing
these
fundamental
determinants
of
intrinsic
value
of
a
security,
it
is
possible
to
determine
an
estimate
of
its
intrinsic
values.
This
estimated
intrinsic
value
can
then
be
compared
to
the
current
market
prices
of
the
security.
A
basic
assumption
of
fundamental
analysis
is
that,
market
price
and
intrinsic
value
can
differ
from
time
to
time,
but
eventually
investors
will
recognize
the
discrepancy
and
act
to
bring
the
two
values
together.
Those
investors
who
can
perform
good
fundamental
analysis
and
spot
discrepancies
should
be
able
to
realize
profits
by
taking
a
suitable
decision
before
the
disparity
is
eliminated
by
the
market.
The
proper
sequence
in
which
to
proceed
in
fundamental
analysis
is,
first
to
analyze
the
overall
economy
and
securities
markets.
Second,
analyze
the
industry
within
which
the
companies
operate.
Finally,
analyzing
the
company
in
terms
of
its
financials.
I
have
tried
to
find
out
the
financial
ratios
for
all
the
five
companies
in
the
spreadsheet
and
show
these
five
stocks
are
good
performing
stocks
over
the
years.
(vii)
Security
Analysis
Security
analysis
is
the
first
step
undertaken
in
the
process
of
investment
decision.
The
task
involves
determining
prospective
benefits
from
investment
in
a
security,
the
conditions
subject
to
which
they
may
be
received,
and
the
likelihood
of
such
conditions.
In
a
sense,
the
task
involves
forecasting
future
conditions,
the
prospective
benefits
from
holding
a
security
given
these
conditions,
and
may
be
received,
and
arriving
at
what
ought
to
be
the
price
for
the
security,
given
these
benefits
and
adjusting
for
the
inherent
time
and
risk.
In
the
similar
sense,
security
valuation
is
the
end
objective
of
security
analysis.
Fundamental
analysis
is
an
approach
to
understand
what
ought
to
be
the
price.
Its
objective
to
identify
the
underpriced
and
overprices
securities
in
the
market
place
so
that
the
investment
decision
of
buying
or
selling
of
the
security
may
be
determined.
Investors
may
adopt
two
different
approaches
to
equity
investment.
They
buy
stocks
at
certain
point
time
and
simply
hold
these
stocks
over
a
period
of
time,
without
restructuring
their
portfolio.
It
is
also
fact
that,
stock
markets
also
portray
cyclical
movements
similar
to
business
cycle.
An
active
investor
who
is
able
to
identify
the
turns
in
the
market
would
be
able
to
buy
at
bottoms
(low
prices)
and
sell
at
peaks
(high
prices)
and
make
substantial
gains
out
of
cyclical
investments.
In
practice,
such
gains
can
be
registered
only
if
an
investor
is
able
to
consistently
buy
and
sell
at
turning
points,
and
if
gains
are
substantial
enough,
then
it
will
be
useful
to
cover
transaction
costs
and
taxes.
Technical
analysis
is
the
study
of
technical
characteristics
which
may
be
expected
at
major
markets
turning
points,
and
their
objective
assessment.
(viii)
-
Economic
Analysis
A
study
of
economic
trends
as
indicated
by
the
rate
of
growth
in
gross
national
product,
employment,
aggregate
corporate
profits,
personal
disposable
income,
balance
of
payments,
inflation,
government
spending,
money
supply
etc.
In
all
the
aspects,
when
I
consider
from
a
US
markets
point
of
view,
there
are
healthy
signs.
-
The
Obama
government
is
very
supportive
to
develop
the
economy
and
there
are
many
packages
rolled
to
improve
the
economic
activities
in
the
country.
-
In
the
US,
there
is
a
healthy
relationship
between
economic
trend
and
economic
policies
and
the
stability
of
such
relationships
has
been
established.