What is your story about how to construct good portfolios

Assignment Help Accounting Basics

Reference no: EM131966925

Question: Trading Simulation Project

Summary: This project is to help students to get familiar with the process of finding trading strategies. The excel file ‘project2_data' provides information on firm characteristics and returns for 88 firms across 1990-2008. However, the returns in 2008 of these 88 firms are not reported. Students are supposed to find a good trading strategy, with 100$ (no short sales), for 2008 based on the information by 2007, which means that students are at the beginning of 2008 and thinking about how to trade across these 88 firms to get a good return at the end of 2008.

The student should construct a trading strategy with reasonable justifications, test the strategy and have correct inferences from the test. The writing is clear and logical. The project describes the portfolio for 2008 clearly and receives a reward according the actual performance. In specific, you need to answer the following questions:

1. What is your story about how to construct good portfolios (trading strategy)? In other words, which firm-level variable(s) can serve as a standard for picking stocks?

2. How do you show that your trading strategy works in 1990-2017? Clearly describe how you construct the portfolios and test your strategy. When using regressions in testing your strategy, show relevant results.

Information related to above question is enclosed below:

Attachment:- project2_data-4.rar

Reference no: EM131966925

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