ACCOUNTING 1B

PORTFOLIO MANAGEMENT GROUP PROJECT

 

Goal: To maximize return on investment for a $10,000,000 portfolio.

 

Overview: Form a group with 5 to 7 members.  Each group will select a portfolio of stocks once at the beginning of the quarter.  Each group will decide how to allocate the funds to purchase stocks.  The maximum number of different stocks that can be held at any one time is ten (10).  The minimum number of different stocks is seven (7).  The group will buy and hold the selected portfolio for the quarter.  There will be one opportunity to trade stocks during the quarter.  At the end of the quarter the stocks will be sold generating gain or loss.  Each group will account for its own portfolio, calculating gain or loss.  Any material errors in the calculation will result in a $100,000 “fine” and reduction of portfolio value.  This assignement is worth 40 homework points.

 

Procedures:

 

1.      The stocks will be selected at the group meetings during the 3rd  week of class.  The purchase price will be the closing price on the last market day of the 2nd  week.  The group will prepare a portfolio report showing member’s names, stock selected, stock symbol, exchange name (NYSE etc.), purchase date,  closing stock price per share, number of shares purchased, the total dollar value of each holding and the total of all investments.  No commissions will be charged.

 

2.      Stocks can be traded (this is optional) at the group meetings during the 7th week of class.  The trading price will be the closing price on the last market day of the 6th week. The group will fill out any trade information on the portfolio report showing sale information and gain or loss.  Any new purchases will be added to the report with the current sales date.  No commissions will be charged.

 

3.      All remaining stocks will be sold at the group meeting during the 11th week of class.  The sale price will be the closing price on the last market day of the 10th week. The group will finalize the portfolio report showing sale information and gain or loss.  No commissions will be charged.

 

4.      Only purchases of common stock traded on NYSE, AMEX, or NASDAQ are allowed.  Only long positions are allowed.  Mutual funds, short sales, options, etc. do not qualify.  All of the portfolio must be invested at all times in common stocks…no cash allowed.

 

5.      An Excel template is available on the CPAscott website. Use this to keep track of your portfolio.  da1b_portfolio_template.xls