Spreadsheet

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1.You have $100,000 to invest in ten stocks, $10,000 in each (no mutual funds). You may not alter your selections during the semester, and cash is not an option. (Sorry; the purpose of this assignment is not to teach trading. Ad- ditional material will be added as the semester progresses.) Select an Internet source and set up a “watch account.” Possible websites with in- formation on companies include the following: Bloomberg: http://www.bloomberg.com CNN/Money: http://money.cnn.com Forbes: http://www.forbes.com Google: http:///www.google.com/finance MarketWatch: http://www.marketwatch.com Morningstar: http://www.morningstar.com MSN Money: http://moneycentral.msn.com/ investor Reuters: http://www.investor.reuters.com Yahoo! Finance: http://finance.yahoo.com The watch account will help you follow the stocks over time and keep track of your gains or losses.
2. One successful portfolio manager, Peter Lynch, has suggested that you should buy stock in com- panies that you know or whose products you use. Since this strategy may be as good a start- ing point as any to learn about investing, I have selected five stocks I know or whose products I use. You should select five and track your five against mine. Using the information in the pre- vious assignment, set up a watch account that includes both sets. My stocks and their ticker symbols are Coca-Cola (KO) ExxonMobil (XOM) Merck (MRK) Tupperware (TUP) Washington Real Estate Investment Trust (WRE) Since disclosure is important in investments, you should know that I had a position in each stock at the time this text went to press.
1.      Read “The Financial Advisor’s Case on Pg 16 in your text. 

2.      Build a spreadsheet for your Watch List which includes the author’s 5 stocks and 5 of your own selection.  You may choose any 5 stocks that interest you.  Include columns indicating the sector and the beta for each stock.  You are starting with $100,000 – allocated equally for each of your 10 holdings. Include a column for the initial number of shares you purchased and one for closing prices at Friday’s close.

 
3.      See attached Worksheet as a sample.

 

4.      Each week, add a column for the Friday closing price and one for the total value of the holding.  If the stock declared a dividend, reinvest it and update the number of shares.  Continue adding weekly data until the end of Week 9.  You will analyze the data by answering the questions that are in the Sample.
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1,you were asked to select ten stocks with a total cost of $10,000. This assignment adds to what you have already done. Do (a) to (e) on page 171 using the data you should have populated so far. See my lecture notes for more pointers.
a. Obtain the beta coefficient for each stock and calculate the beta for your portfolio. b. What does your portfolio’s beta coefficient tell you about the tendency of the port- folio to move with the market? c. Find the beta coefficients from another source for each stock. Does the ranking from least risky to most risky for the ten stocks differ? Are the two portfolio beta coefficients different? What does any difference in the portfolio betas imply about the accuracy of the measures of systematic risk associated with your portfolio? d. How has each stock performed since the assignment began? What is the portfolio currently worth? What is the percentage change in the portfolio? e. How did an index of the market such as the Standard & Poor’s 500 stock index perform? Did your portfolio follow the market?
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    fin315_worksheet_for_project.xlsx

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