Portfolio management

Group assignment

1. Introduction

To help students in getting familiar with investment activities, this assignment

will provide each study group a fictional amount of capital (500 million VND) to
invest in the Vietnamese financial market. Students as group are expected to work
together in order to make their best investment decision on portfolio basis. Along
with the time line of the assignment, more tasks can be provided to each group.
These tasks emphasize the applications of portfolio management theory within the
context of the study materials.

2. Requirements

• Study group has to invest in the Vietnamese financial market (stock

market products, in HaNoi, and/or in Hochiminh stock exchange) with an
assumption of having no transaction cost (no broker fees, etc). We also
assume that trading price of stocks will be unchanged regardless the
amount of stock trading.
• Study group has to report their investment activities on daily basis
(please find other details of the daily investment memo in appendix).
• Group must write a weekly review of its investment activity (please find
other details of the weekly review in the appendix).
• Group must have at least three trading days per week. Total amount of
trading stock in value of a trading day must be at least 40% of the holding
portfolio value (for example, if the capital amount of portfolio holding of
the group is 460 million VND, then per trading day, this group has to of
buy/sell stocks with a total transaction value at least 0.4x460 million VND
(184 million VND).
• For the same security, study group only can trade this security one time
per day (buy/sell) (for example: if a study group buys a certain amount of
stock A, they must wait until the next trading day to buy more/ sale this
stock A)
• Group must devote at least 90 % of their capital for investment
activities (450 million VND of investment value at least) over the whole
investment period (from week 4-14).
• Sources of information or used data must be well documented and
cited for references in daily memos, weekly review, and other given task
(http links, excel files, name of author, etc)

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Example of a trading week:

Monday:

Buy stock A at price a1: 20,000 VND per stock, buy 10,000 units (total value :
200 mil)

Buy stock B at a price b1: 15,000 VND per stock, buy 6667 units (total value:
100 mil)

Buy stock C at a price c1: 30,000 VND per stock, buy 5000 units (total value:
150 mil)

Write a memo of Monday trading activities.

Ending balance of Monday: in stock 450 mil, cash 50 mil

Tuesday:

Sale stock A at a price a2: 21,000 VND per stock, sell 10,000 units (total
value: 210 mil), make a profit of 10 mil for selling stock A

Buy stock D at a price d1: 10,000 VND per stock, buy 20,000 units (total
value: 200 mil)

Write a memo of Tuesday trading activities

Ending balance of Tuesday: in stock 450 mil, cash 60 mil (50 mil of Monday
+ 10 mil profit of selling stock A)

Wednesday:
Group decided not to trade on Wednesday

Thursday:

Sale stock D at a price d2: 10,500 VND per stock, sell 20,000 units (total
value: 210 mil, make a profit of 10 mil for selling stock D

Buy stock E at a price e1: 25,000 VND per stock, buy 10,000 unit (total value:
250 mil)

Write a memo of Thursday trading activities

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 Ending balance of Tuesday: in stock 500 mil, cash 20 mil (+ 10 mil profit of
selling stock D)

Friday:
Group decided not to trade on Friday

Saturday/Sunday:
Write weekly report

3. Grading

The maximum of 7 points will be awarded for groups that hand in their report on-
time (daily memo / weekly review / random assignment) with acceptable
quality.

Based on the portfolio performance (total ending value, profit/losses), the

maximum of 3 points will be awarded to the group with the highest portfolio
ending value. Other groups will be benchmarked against the top group for their
portfolio performance.

Any form of falsified data and information for any purpose in this
assignment if discovered will result in a reduction of 5 points per time
for all members of the study group.

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APPENDIX

Study group must send daily memos (Monday-Friday of the trading week at 12
PM the latest) and weekly review (on Sunday 12 PM of the trading week the
latest) in zip/rar format to this email:

quantridanhmucdautu@gmail.com

These files must use the following format:

group “number”_dailymemo_day (DD/MM/YY).zip (or .rar)

Data folder
Document folder
Dailymemo.doc

group “number”_weeklyreview_day (DD/MM/YY).zip (or .rar)

Data folder
Document folder
Weeklymemo.doc

Used information and data must be sent together with daily memo and weekly
review zipped file. (if students use stock data from a particular website, please
take notes (http:// address, extract data to excel file, and send all these relevant
information with the zip file)

1) DAILY MEMO (at least 1 page)

Group must use this format for the daily memos:

Starting balance: in stock ___________ , in cash ________________

Trading activities in day ________________ (DD/MM/YY)

1) buy/ sale stock ____________ , price _________, execution time

____________(Hour: min) , total value ____________

2) buy/ sale stock ____________ , price _________, execution time

____________(Hour: min) , total value ____________

3) buy/ sale stock ____________ , price _________, execution time

____________(Hour: min) , total value ____________

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 4) buy/ sale stock ____________ , price _________, execution time
____________(Hour: min) , total value ____________

5) ………………

Ending balance: in stock ___________ , in cash ________________

Profit /losses: ______________

Reasons for buying/selling stocks: students must provide some basic

reasoning why they want to buy /sell stocks in their trading day (financial
ratios analysis, macro-news, firm news, expectations, invest in a specific
sector, etc)

2) WEEKLY REVIEW (at least 2 pages)

Group must use this format for the weekly review:

A. Market overview:
Study group must provide an overview of the market of the trading
week. This section can include information about the market (some
market statistics, which stock is gaining or losing, returns, important
news or event that might affect the portfolio, relevant industrial
news,…etc)

B. Portfolio overview:
Calculate some statistics of the portfolio, return, standard deviation,
coefficient of variation, return/losses, etc

Apply relevant techniques to evaluate stock performance (financial

ratio analysis, CAPM, Markowitz, etc) and give some analyses.

C. Plan for a new trading week:

Study group suggests some speculation / expectation about the stock
market next week with a proper reasoning. Based on these suggestions,
study group decide on what stocks should be traded next week, etc.
Obviously enough, study group can change their action plan in real
time for the next trading week depending on the real situation change.