Select a specific financial asset traded in a spot market (e.g., specific fixed income security, common stock, foreign exchange, or commodity contract). The student will specify one or more derivatives (e.g., specific forward contracts, futures or options) that will be combined in a portfolio as part of a specific trading strategy (e.g., hedge or speculative strategy)
The written report should discuss the rationale for the trading strategy that was selected. The report will include detailed metrics concerning the weekly returns of the portfolio suitable for students to report annualized average returns and standard deviation in returns. (from October 11th to December 12th, totally 10 weeks) Students will be required to assess reasons for the performance of their portfolio.
Select the Apple Inc and the Samsung Electronics option contract as part of a hedge strategy that are combined into a portfolio.
a. Identify the financial environment pertaining to selecting assets for their portfolio
b. Extract appropriate financial and accounting data from various sources to support the analysis
c.Use and appraise the data collected in a meaningful way
d.Estimate the role of derivatives in enterprise value creation
e. Evaluate financial asset performance using relevant and appropriate benchmarks
f.Demonstration of resulting business strategies that may be driven by secondary ramifications
g.Assess risk (uncertainty)
h.Interpretation of the impact of the global environment on derivative securities