FINANCIAL MARKETS COURSEWORK ASSIGNMENT HELP ONLINE
This coursework is to be prepared as a group assignment. Each group must consist of 4 students. Each group selects THREE countries to analyse from the following list: USA, UK, Germany, Japan, or Italy. The word limit is 3,500 words, anything beyond that will be ignored. You are encouraged to use Bloomberg as a primary data source (in the appendix, state 15 commands in Bloomberg, which were the crucial to do your analysis). Use tables, figures and bullets to provide a coherent and clear message. It is your responsibility that reader will understand it.
The following steps should be followed in preparing your report:
1. Focus on the past 5 years. For each country, describe the basic characteristics of their bond markets, equity markets and derivative markets (volume, turnover, regulation and restrictions, the most important events over the past 5 years – just few of the most striking ones, major stock exchanges etc). State the basic trends over time and compare them together and to the size of GDP. For bond markets, focus on both the sovereign and corporate bonds, focus on the existence of the TIPS and STRIPS, if they exist there. Use figures to convey the message. The aim is to provide a basic overview of the markets for the reader.
2. Choose a particular date in a week 2-6th March 2015. For this date, recover the spot yield curve from the Bloomberg. Download available government bonds and recursively strip your own yield curve. Depict the result and describe the difference, if any, and advocate why it is there. Describe the instruments you have used (e.g., in a brief table). For each country, do the same with Eurobonds (download the spot yield Eurobond curve and calculate your own based on the futures). Compare the spot and Eurobonds-based one.
3. Given the current market situation in each of the three countries, suggest which bonds are the most suitable for short-term (1-year), medium-term (5-years) and long-term (10-years) investment horizon, respectively. Discuss why you have chosen them in terms of different types of risk.
4. For each of three countries, choose a portfolio of 5 companies with largest capitalization to the date from point 2. For each country, form an equally weighted portfolio and calculate expected return and volatility over the past 5 years. Compare it with the main stock index and with characteristics of individual assets (those 5 you have chosen). Report all numbers in annualized terms (both return and volatility)! Use monthly frequency and local currency to work with data.
5. For each country, form a mean-variance portfolio using monthly data over the past five years for the 5 assets you have chosen. As a target return, use the one from the equally weighted portfolio. Discuss the volatility of the optimal portfolio.
6. Convert prices into dollar terms. Compare the performance of the three optimal dollar denominated portfolios (you have to calculate expected return and volatility using the dollar denominated prices!).
7. Compare the performance of each of the portfolio with the country-specific ETFs (and briefly describe the ETFs you have used).
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