Business & Economics Faculty - Banking and Finance Department EMU

GUIDELINES FOR THE ASSIGNMENT

Due date: 11/12/2017 (Monday). The assignment should be submitted at the
lecture hour.
Late submissions will not be accepted.
Submission is individual. Do not plagiarize any material. Plagiarism is a
disciplinary offense and will be dealt accordingly.
You are given supplementary Microsoft Excel files to help with the assignment.
You need to show all the required estimations in the supplementary Microsoft
Excel files.
You are required to submit the professional report accompanied with Excel files.

INVESTMENTS - FINA 503

The description of the case is provided below.

Description of the Case:

EMU Fund Co. announces an open vacancy for the full-time junior position among
trainees. It has been several months that you do a traineeship in EMU Fund Co., and it
increases your chance to get this job. However, there are other trainees as well hunting
for this job. The boss decides to test all trainees by giving a portfolio optimization task.

Description of the Task:

The task requires you to create an optimal portfolio, which will consist of Stock X and
another stock. You will diversify Stock X with one of these stocks: Caterpillar, Tesla,
Royal Dutch Shell and Microsoft.

The monthly prices of all the stocks are provided to estimate the expected returns,
standard deviations, and covariance (correlation) of stock X with selected stocks. Show
the opportunity set, capital allocation line, optimal portfolio proportions. You are
required to write up a professional report after finalizing your analyses.