Onstruction, Analysis and Performance Evaluation of a Portfolio of Stocks.

An amount of ?100.000 must be allocated across portfolios/stocks, without applying any transaction
fees, at 29/2/2008, closing prices. No trading or reconstruction of the portfolio will be allowed
during this part of the assignment.
The portfolio will consist of Apple Inc. (AAPL), JPMorgan Chase & Co (JPM) and Exxon Mobil Corporation (XOM).

It should maintain and update weekly a workbook file with multiple spreadsheets
consisting of the following information:
(1) A brief company profile of each stock purchased, including a summary of the company s
products, where it operates, strengths and weaknesses in comparison to its competitors,
corporate news and copies of the most recent annual Income Statement and Balance Sheet.
(2) A brief profile of the industry selected, including the stocks listed, the construction of the
industry index and the characteristics of the industry in general.
(3) The number of shares purchased at closing prices
(4) A list of close daily prices starting from 29/2/2008 up to two weeks before submission date.
(5) The risk and the rate of return of each stock, your portfolio, and the overall market portfolio.
(6) The covariance and correlation across stocks and portfolios
(7) The security market line and the beta for each stock.
(8) A description and critical discussion of the performance of your portfolio.

In the analysis you should use graphs and tables in order to make the exposition clear. All
calculations should be explicit in the worksheet and not borrowed by any other sources(e.g.
published betas or correlation coefficients).

The final part of the assignment involves a restructuring of the overall portfolio by selling and
buying any stock you wish. You should justify the trades with relevant arguments.

You should produce a detailed report on the performance of the investment from
29/2/2008 to 18/4/2008, a comparison of the portfolio to the general index and a risk-free asset
according to the different types of performance measurement techniques.