Module Title: Investment Management

Module Title: Investment Management

Module

) Assessment Question

Title:

Thematic Investing and Investment Proposal.
Two files for submission: an investment proposal presentation (Max 20 slides) & report document
(max: 2000).
You will not be required to present just to submit the presentation!
Optional: Submit the excel workbook used for computations.
Objective:

To understand the key concepts, approaches, evidence and models of modern financial theory and
practice.
Task Description

and Context:

You are working for an asset manager firm in London and you are asked to create and investment proposal
for a new client. The potential investor has not disclosed his risk aversion level yet, therefore you are
asked to include in the investment proposal two different portfolios reflecting two different levels of risk
aversion. The client would like to invest in a portfolio where the risky component is chosen according to
an “investment theme”. The investment horizon of the client is medium to long-term (5 years) and
therefore he would like to chose and investment proposal with a strong motivation behind.
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You have to select at least 5 different risky assets (stocks, ETFs, funds) according to your investment
theme and suggest one hedging strategy (e.g. an option position that can potentially cover the investors
from its equity position).
Considering the above information, you must prepare an investment proposal in the form of a power point
presentation and upload it as a PDF file (to preserve the layout you have created). The investment
proposal must be accompanied by a report (you can prepare it with MS Word or equivalent) that carefully
describes the financial instruments that you have chosen and upload it also as a PDF file. You may also
choose to upload the excel file that you have used for computations.
Investment Proposal – Presentation
• The investment proposal (presentation) should not exceed 20 slides and should include all the
following sections.
• All the relevant tables and figures should be contained and discussed in the presentation (no
appendix needed).
• Each section provides the requirements on the tables and figures that you should include. Feel
free to provide any additional table and figure that would be useful.
• NB: Please upload the PDF instead of the power point file to preserve the layout of your
presentation! Further details are discussed in the “Important Coursework Requirements”.
Section 1. Introduction
Introductory slide – Choose a title for your investment proposal (e.g. “Tech Investing”). Include under the
title you student number (e.g. ID: 100XXXX)
Description slide of the investment theme. The description must include an answer to the following
question: Why have you chosen this investment theme? (e.g. you are an expert in the subject; you invest
yourself in this sector/country; you have a strong of view of this sector/country doing well in the following
year).
Example: If you decide to invest in a specific sector specify what is your view of the sector, analogously if
you decide to invest in a macroeconomic trend provide your rationale. Support the rationale (in either)
with recent articles or news1
.
1 You can find news in the major financial news providers (e.g. The Financial Times https://www.ft.com/, Business Insider
https://www.businessinsider.com/international?r=US&IR=T ).
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Section 2. Risky Assets
Present at least 5 chosen risky assets (e.g. stock, funds, ETFs). For each financial instrument download
the monthly adjusted closing price between (01/01/2014 – 31/12/2019) and calculate the monthly
returns. Download also the monthly adjusted prices for a reference market (e.g. if you have 5 stocks and
they are all US based the reference market should be the S&P500 index
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. If you have 5 stocks and are
all from the US and IT sector use the Nasdaq) that should represent the correct reference market of your
portfolio and chosen based on country and industry sector.
For each stock you should provide the following information:
1) The Annualized expected return
2) The Annualized volatility
3) The Annualized Risk Premium
4) The Annualized Sharpe Ratio
5) The Beta
6) The Unique Risk
7) The CAPM predicted return
8) The alpha
NB: If you include funds, you have to recalculate the fundamental metrics and not employing the one
provided by other sources (e.g. the metrics provide by Morningstar).
Section 3. The Optimal Risky Portfolio (ORP)
Compute the optimal risky portfolio (ORP) weights for the chosen financial instruments.
Present the asset with the pie chart and explain the rationale behind it. Remember that your client might
not be familiar with this topic and it’s therefore crucial that you are clear about the terminology and what
are the advantages and disadvantages of the two asset allocations.
Provide the summary statistics for the presented portfolios:
– The Annualized Expected Return
– The Annualized Volatility
– The Sharpe Ratio
– The Beta
2 Available download sources: Eikon – Refinitiv / Yahoo Finance.
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– The Unique Risk
– The CAPM predicted return
– The alpha
– The Information Ratio
– The Treynor Ratio
Provide a Rationale for the measures in accordance to the risk profile of the portfolios.
Section 4. The Complete portfolios
Compute the Complete Portfolios with the ORP from the previous point.
To compute the complete portfolios you have to assume two different level of risk aversion (A). In one
case you should assume that the client is a strongly risk averse client. In the other case you should assume
that your client is either risk lover or neutral.
You can assume the average for the considered period of the 3 months T-bill rate for the risk free rate
(annualized)3
.
Present the following summary statistics for the two different complete portfolios:
– Annualized Returns
– Annualized Volatility
– Annualized Sharpe Ratio
Plot the Capital Allocation Line (CAL) and show the position of the ORP and the 2 complete portfolios.
Section 5. Hedging instrument proposal
Suggest a derivative strategy (options, forward or future) consistent with the choices of your portfolio.
There is no need for data analysis in this section, but you can create an example with numbers (e.g. the
strike price equivalent to stock price of one of your chosen stocks). You have to clearly describe the
strategy with the help of a graph and the rationale behind it (e.g. suppose that you have a portfolio made
by UK stocks, you might want to protect it against the upside-down of the overall market).
Section 6. Final Remarks and Recommendations for your client.
3 This can be downloaded from Eikon or from the Federal Reserve website (https://fred.stlouisfed.org/series/TB3MS).
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Based on the findings of Section 3 and 4 provide a rationale for your client. Present the relevant summary
statistics for the ORP and a clear motivation on why the client should invest in your portfolio. Based on
the two level of risk aversion provide a recommendation for the client.
Report – Word Document
The word document should be a maximum of 2’000 words and include a description of the financial
instruments that you have employed in the presentation.
The report should include the following sections:
Section 1. Introduction
Provide and introduction and a description of your investment theme. The investment theme can be a
“macroeconomic theme”, focused on investing on certain countries or according to macroeconomic
themes, such as high/low growth countries. The investment theme can be “industry focused”, such as
investing in a specific industry that you think that will do particularly well in the future. The investment
theme can be a global trend theme, such as Environmental, Social and Governance (ESG) factors.
Section 2. Provide a clear description of the financial instruments included in
your portfolio
– If you have chosen stocks provide a clear description of the company, the sector and a clear
motivation of its inclusion in the portfolio. There is no need to report financial metrics here,
however, you should report relevant information (e.g. particular company events and
announcements) if they are part of the motivation for its inclusion in the portfolio.
– If you have chosen to include funds (e.g. ETFs or mutual funds), you should provide a clear
description of the fund, how it is managed (passive vs active) , the strategy and the motivation
for its inclusion.
– If your portfolio is part of a “thematic investing” strategy provide a clear description of it and of its
sector.
Important Coursework Requirements:
You need to submit 1) an investment proposal (Presentation Length: max 20 slides) & 2) a Report
(Word Length: max 2000 words). The investment proposal and the report count for 100% of your grade.
The investment proposal (power point presentation) and the report will equally count towards your mark
(Investment Proposal = 50%; Report = 50%).
– You should submit both documents electronically by naming the files with your student number.
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– The investment proposal (power point presentation) should be submitted as a PDF file (to
preserve your layout). There are no specific guidelines on fonts, design, or layout, however, you
must include the slide number.
– The report must be word processed in Microsoft Word (or equivalent software) and submitted as
a PDF file. All sections, tables and figures must be clearly titled and sequentially numbered. All
tables and figures should self-explanatory and should include necessary axis definitions and
legends. Apply appropriate formatting for the tables and figures. Numbers in the text, tables and
figures should have a reasonable number of decimal points to allow an accurate representation
and comparisons (usually between 2 and 4 decimal points).
– All the sources (academic and non) that you have used must be clearly stated and referenced in
a reference section at the end of the report.
– Any questions related to the coursework should be submitted to the “Q&A Coursework” discussion
board on the Blackboard Site of the module. The link to this forum is within the list on the left. To
ask a question, post your question under the thread “Coursework”. You should also click on
“Subscribe” to receive an email when a new question is posted. You should visit the forum
regularly.
– Failure to submit any of the two files will cost you marks and may mean that you fail the
coursework.
Word Length: 20 slides for the presentation and 2’000 words for the report.
Penalties for exceeding the word limit
Less than 10% over word limit No Penalty
10% or more over the word limit Deduction of 10 marks off original mark
Failure to provide an electronic copy when
requested
Mark capped to the pass mark
Intentional misrepresentation of the word count on
the coversheet
Mark capped to the pass mark
NOTE:
1. When the original mark is within 10 marks of the pass mark, the penalty will be capped at the pass
mark
2. Original marks below the pass mark will not be penalised
Source:
https://portal.uea.ac.uk/documents/6207125/7465906/Section+3+Submission+of+Work+for+Ass
essment+-+Taught+Programmes.pdf
UG Coursework Assessment Criteria
In preparing your coursework, you should be aware that you will be assessed by reference to the extent
to which your answers meet the following criteria:
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• Identification and application of knowledge to the question asked
• Capacity to find data from online resources
• Ability to apply theories related to the question asked
• Demonstration of ability to structure and present work in a clear and coherent way
• Evidence of reading and research
• Clear and accurate expression
Students are advised to be aware of the revised “Senate Scale Classifications 2012/13 – Coursework.”
These scales which provide general guidance on the standards required for the award of marks for
coursework.
These are available at:
https://my.uea.ac.uk/documents/20142/490081/Senate+Scale+Undergraduates.pdf/6e26f983-b2c7-
08ab-ad5f-becf9b3a029a?t=1588552010883
The marking grid based on the above Senate Scale Criteria will be the following:
Senate Scale Criteria Proportion of
Marks %
Learning outcomes & scholarship 35%
Argument & understanding, and
Criticality & analysis 35%
Presentation 20%
Use of sources and evidence,
Written communication.
10%
Total 100%
• This coursework counts for 100% of the assessment in this module.
• The investment proposal (power point presentation) and the report will equally count towards
your mark (Investment Proposal = 50% ; Report = 50%).
• Please preserve anonymity by using your university number, not your name.
Good luck!
Submission Details
The deadline for submission for all assessment coursework files is 15:00 on Wednesday 19th January
2022.
Please make sure that each file of your submission does not exceed 5MB in file size.
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The assignment will be submitted electronically via Blackboard; there will not be an option to submit a
hard copy. Even late assignments, or those that have extensions, should be submitted electronically rather
than in paper format. Work uploaded after 15:00 on the specified deadline day will incur a late penalty
unless there is an approved extension. Students are advised not to leave it to the last few minutes before
15:00 to upload work, just in case they encounter any upload problems.
Students will need to fill in the following on the e-cover sheet:
1. Add in the marker’s name where they have been asked by their lecturer to do so.
2. Students should add in the Word Count for their piece of work, including the footnotes and
endnotes, references (in the main text), tables and illustrations and if applicable the abstract,
title page and contents page. Any appendices material and the bibliography or reference list
should not be included in the word count.
3. Students should also apply their Specific Learning Difficulty (SpLD) e-sticker, if appropriate
Where your module is being marked via Blackboard, please go to the module Blackboard site and submit
your work via Summative Assessment, in the left hand column.
How will you know where to submit your work?
Your coursework submission page on the portal will tell you. If there is an instruction beside the
assessment item saying ‘work to be submitted via Blackboard’, then you must go to the module
Blackboard site. If in doubt, please contact your hub immediately to check.
University Policy on Plagiarism and Collusion
It is important that all students familiarise themselves with the rules and regulations regarding plagiarism
and collusion. Understanding these rules will help you to avoid plagiarism and to maintain the quality of
your academic work.
Information and support on how to avoid plagiarism can be found in:
https://www.uea.ac.uk/about/university-information/university-governance/academic-calendar/section3/general-regulations/university-policy-on-plagiarism-and-collusion
Individual study skills support and advice on referencing is also provided by the Learning Enhancement
Service at the Dean of Students Office.
You may be requested to provide a digital copy of your coursework (after an initial examination of the
hard copy by the coursework assessors) for use with plagiarism detection software. Instances where
plagiarism is suspected will be investigated. Students who are found to have plagiarised will be penalised.
In proven cases offenders will be punished and the punishment may extend to degree failure, temporary
suspension or expulsion from further study if the case comes before a Discipline Committee of the
University.
Coursework Deadlines
All assessment coursework files must be submitted byk;.
Failure to submit on time without an approved extension will result in a penalty for late submission.
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Please note that the deadline represents the last time that a piece of work can be submitted, and not a
target. You are advised to plan ahead, and submit work well in advance of the deadline. This will help to
ensure that any last minute delays do not result in late submission.
Extensions to Coursework Deadlines
In exceptional circumstances, you may be entitled to request an extension to a deadline for the submission
of work required for assessment. Requests for coursework extensions should be applied for online via
eVision together with appropriate supporting evidence.
Extension requests can be submitted on the following grounds:
• Medical (subject to a doctor’s note)
• Serious personal issues (subject to supporting evidence)
Extension requests cannot be considered for the following:
• Poor time management
• Transport or parking delays
• IT problems (unless evidence can be provided from an IT technician)
• Medical or personal circumstances that are not accompanied by supporting evidence
You should plan your work so that minor delays do not prevent submission on time. In all cases, you
should ensure that you make regular backup copies of all coursework in progress.
Where extenuating circumstances prevented you from applying for an extension in advance of the
deadline, work submitted after the deadline should be accompanied by an online extension application.
Allowance will be given for acceptable extenuating circumstances and in such cases penalties for late
submission will not be applied.
Extension requests will be considered by the Coordinator in those instances where acceptable
extenuating circumstances exist and the request is submitted before the deadline. The designated
member of academic staff in the School will consider all other requests.
Penalties for Late Submission
If you submit coursework after the published deadline, without an approved extension, the following
penalties will apply:
Work submitted Marks deducted
After ‘g the due date. (Up to 24 hours) 10 marks
After 15:00 ‘ 20 marks
After 15:00’ All the marks the work merits if submitted on time
(i.e. no marks awarded.)
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After 20 working days Work will not be marked and a mark of zero will be
entered.
Late submission of pass/fail marked work for assessment in the absence of acceptable extenuating
circumstances will be awarded a fail mark.
Saturdays & Sundays will not be taken into account for the purposes of calculating marks deducted.