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Investment Analysis Project for BBA

The document outlines a project assignment for BBA (Hons) Semester 8th Spring-2024 focused on investment analysis and portfolio management. Students are required to analyze two selected stocks from the Pakistan Stock Exchange, calculate various financial metrics, and assess portfolio performance using MS Excel. The assignment includes strict deadlines and specific instructions for submission, emphasizing individual work and the use of quantitative analysis methods.

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ihsanazeemullah
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3 views2 pages

Investment Analysis Project for BBA

The document outlines a project assignment for BBA (Hons) Semester 8th Spring-2024 focused on investment analysis and portfolio management. Students are required to analyze two selected stocks from the Pakistan Stock Exchange, calculate various financial metrics, and assess portfolio performance using MS Excel. The assignment includes strict deadlines and specific instructions for submission, emphasizing individual work and the use of quantitative analysis methods.

Uploaded by

ihsanazeemullah
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

INVESTMENT ANALYSIS & PORTFOLIO MANAGEMENT

BBA (Hons) Semester 8th Spring-2024


PROJECT ASSIGNMENT
Instruction:

a) The deadline for this assignment is before the commencement of the final term exam.
b) The assignment should be solved individually.
c) The solution of each part should be through MS Excel, handwritten solutions will not be acceptable.
d) The deadline is strictly binding, without exception; late assignments will not be acceptable
whatever the reason is.
e) Do not forget to mention the complete name and class number on the front page.

Question:

1. Select any two stocks of your choice and collect daily closing price data from January 2024 to April
2024 for each stock from the Pakistan Stock Exchange.
2. Calculate logarithmic returns for each stock (Hint: Formula: return=ln(closing price
today/closing price yesterday)).
3. Compute the arithmetic mean of returns, standard deviation of returns, and coefficient of variations.
4. Discuss the two stocks in terms of their average return, absolute risk, and relative risk.
5. Calculate the covariance between the returns of two selected stocks. Also, calculate the correlation
coefficient.
6. Suppose you want to invest a total of Rs. 100,000 in these two stocks to make your portfolio with
the following proportion:
Stock 1= Rs. 40,000
Stock 2= Rs 60,000
Based on the calculation done in questions 3 and 5, calculate your portfolio return and risk.
7. By changing the weights in your two assets portfolio, report the results of returns and risk of your
portfolio.
8. As we know the minimum variance portfolio is the particular combination of securities that will
result in the least possible variance. To solve for the minimum variance portfolio, find the
proportions that should be invested in stocks 1 and 2.
9. The potential of an asset to diversify a portfolio is dependent upon the degree of co-movement of
returns of the asset with those other assets that make up the portfolio. To eliminate all portfolio risk,

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what correlation coefficient in the returns of two securities should we use? (Hints: demonstrate it
by changing the rho value in the Markowitz formula through MS Excel).
10. Compute the following performance measures for your portfolio:
a) Sharpe’s ratio (hint: take T-Bills rate as risk-free rate);
b) Treynor’s ratio (Hint: use portfolio beta=1.25);
c) Jensen’s Alpha (Hint: use portfolio beta=1.25).
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