Portfolio Investment
BOURNEMOUTH UNIVERSITY
International Investment Management
Mid-term Assignment
Submitted by: Anindyta Ayu Indhriawati
25/03/2014
Submitted to: Dr Charalampos Stasinakis
The purpose of this paper is to examine the relevance from the modern portfolio theory to the global investment market. Some of the questions that related to the use of techniques about the portfolio theory and it’s relation to risk and return will be discussed in terms of solving the complexity of the portfolio problems faced by investor and how to make a decision based on the investment analysis.
By choosing 5 random company’s stocks for one month period under the FTSE100 that taken from yahoo finance, hence expected to answer about the uncertainty regarding investment in portfolio. The companies are Melrose Industry Plc, BP Plc, Vodafone Group Plc, GlaxoSmithKline Plc (GSK), and Kazakhmys Plc. The used data was the daily closing price data for January 2014.
Table 1 Daily stock price from 5 companies under FTSE 100
Source: Yahoo Finance (2014)
From the data taken it shown the historical stock price for each company. Furthermore, daily stock price data will be used for counting daily return to have the final average return. Daily return can be obtained by calculation with the following:
Daily return for the first trading day will be unavailable since there is no available information for the data before first trading day. For example, daily return formulation for BP Plc on date 1/2/14 will be [=(C4-C3)/C3].
Table 2 shown daily return for 5 companies and by using formula in excel, the average return (=AVERAGE) and standard deviation (=STDEVA) can be acquired. For example, Kazakhmys Plc average return is [=AVERAGE (M4:M25)] and the standard deviation is [=STDEVA (M4:M25)].
Tabel 2 Daily return single asset
Daily return data can be used for calculate covariance by using
International Investment Management
Mid-term Assignment
Submitted by: Anindyta Ayu Indhriawati
25/03/2014
Submitted to: Dr Charalampos Stasinakis
The purpose of this paper is to examine the relevance from the modern portfolio theory to the global investment market. Some of the questions that related to the use of techniques about the portfolio theory and it’s relation to risk and return will be discussed in terms of solving the complexity of the portfolio problems faced by investor and how to make a decision based on the investment analysis.
By choosing 5 random company’s stocks for one month period under the FTSE100 that taken from yahoo finance, hence expected to answer about the uncertainty regarding investment in portfolio. The companies are Melrose Industry Plc, BP Plc, Vodafone Group Plc, GlaxoSmithKline Plc (GSK), and Kazakhmys Plc. The used data was the daily closing price data for January 2014.
Table 1 Daily stock price from 5 companies under FTSE 100
Source: Yahoo Finance (2014)
From the data taken it shown the historical stock price for each company. Furthermore, daily stock price data will be used for counting daily return to have the final average return. Daily return can be obtained by calculation with the following:
Daily return for the first trading day will be unavailable since there is no available information for the data before first trading day. For example, daily return formulation for BP Plc on date 1/2/14 will be [=(C4-C3)/C3].
Table 2 shown daily return for 5 companies and by using formula in excel, the average return (=AVERAGE) and standard deviation (=STDEVA) can be acquired. For example, Kazakhmys Plc average return is [=AVERAGE (M4:M25)] and the standard deviation is [=STDEVA (M4:M25)].
Tabel 2 Daily return single asset
Daily return data can be used for calculate covariance by using
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