Prepare a brief profile of each corporation

Assignment Help Portfolio Management

Reference no: EM131451531

OVERVIEW

Assume you are a hedge fund manager or an investment manager investing for your clients'' funds in stocks, bonds, futures, options, foreign currencies, oil, gold, silver, and other commodities based on profit sharing.

For this research project, you are required to research the stock market and choose two stocks to invest in for the account of one your clients who has given you $80,000.

You may use Yahoo Finance at https://finance.yahoo.com to find stocks. Or you can use Bloomberg at (https://bloomberg.com/markets/currencies ) for finding the major world currencies or news about the stocks,currencies, and economies.

Guidelines

Use the $80,000 to invest evenly in the two stocks which you have selected based on a 50% margin (currently stock margin is 50%) which give you a leverage of 2 to 1, meaning you can invest up to $160,000 in both stocks. The following are some more requirements:

1. Prepare a brief profile of each corporation in which you have invested your clients fund.

2. You may take a long or short position in each stock or long position in one or short position on the other.

3. Justify your investment decisions based on the health of the firm such as profitability based on the income statement, debt to equity ratio based on the balance sheet, expected cash flows, innovations, and some other variables you may consider are important.

4. Justify your investment decisions based on the health of the industry. For instance, if the housing market is in trouble, hedge fund managers may take short positions in some stocks of this industry.

5. Justify your investment decisions based on the health of the economy. For example, when the
economy is growing and the job market is healthy, most stocks are rising and investment managers take long positions in many stocks.

6. You may also justify your investment decisions based on monetary or fiscal policies taken by the policy makers.

7. Select the two stocks which have negative correlations or a weak correlation for your portfolio for risk management purpose.

8. Calculate your return for each investment and your portfolio return.

9. Prepare your findings in a 4-6 page research report based on the APA format and submit it by due date

Reference no: EM131451531

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