Portfolio Construction Task
Scenario: You've been tasked with devising a portfolio for a risk-averse client at an Investment Bank, aiming for a minimum annual return of 8% on an initial investment of £100,000. Utilizing daily adjusted-closing prices of real UK listed company stocks over a two-year period (1st Jan 2022 to 30th Dec 2023), alongside the performance of the FTSE100 during the same timeframe, create a comprehensive investment plan.
Data Requirements:
- Obtain daily adjusted-closing prices of real UK listed company stocks and the FTSE100 performance data from reliable sources such as Yahoo Finance.
- Utilize MS Excel for necessary calculations, with the written analysis to be provided in a Word document.
- Ensure all calculations are discussed in the Word document, as Excel will solely be used for verification purposes. Failure to discuss calculations will result in deduction of marks. Submit both files.
Key Considerations:
- Identify stocks based on market capitalization and compute their yearly returns and risks, alongside those of the FTSE100, from the start to the end of the specified period. Express results to two decimal points.
- Determine correlations among the selected stocks. Provide insights and interpretations on the findings
Please find attached the graphical presentation detailing how to address this particular question.
