VICTORIA UNIVERSITY VE SCHOOL OF FINANCE & LIBRARY ADVANCED DIPLOMA OF ACCOUNTING EVALUATE FINANCIAL RISK (FNSACCT609B) Sharemarket Exercise SEMESTER 1, 2010 Overview The objectives of this assignment are to give students: An opportunity to develop their knowledge of the share market. An exposure to the behaviour of the share market without being concerned about personal financial risk. An opportunity to develop their analytical, technological (Excel) and decision-making skills. An opportunity to enhance their presentation skills Some competitive fun. Considerable “bragging” rights can go with being the owner of the best performing share portfolio! Assessment Assessment will account for 30% of the total marks for the unit and will be progressive over the duration of the assignment. The weighting of the assessment is: 5% for complying with the rules of the game 10% for the oral presentation to the class (week 12) 15% for the written submission (week 12) Rules of the Game 1. The game will operate over a 6 week period, commencing week 6 2. Each student team will be given a notional portfolio of $100,000 which must be invested, at all times, in a minimum of 6 stocks 3. The minimum amount of any transaction (buy or sell) is $3000 4. The maximum cash holding, excluding dividends received, at any time is $3000 5. Teams must have at least one buy/sell transaction every week of the game. 6. Each student team must provide details of their portfolio, trades etc on the excel spreadsheet provided. The spreadsheet must be submitted electronically each Monday. 7. Stocks shall be valued, bought and sold using the price at which the stock closed on the previous Friday. Timetable of Events Week 5 Introduction Discuss strategies etc Selection of Initial Portfolios 6 Submit spreadsheet with initial purchases 7 Submit spreadsheet with updated market values and transactions 8 Submit spreadsheet with updated market values and transactions 9 Submit spreadsheet with updated market values and transactions 10 Submit spreadsheet with updated market values and transactions 11 Submit spreadsheet with updated market values and transactions 12 Final presentation due Written report due Presentation requirements In your final presentation ( covering the 6 weeks) I want you to cover: The investment objectives you have set. The strategies you have developed to achieve your objectives. The processes you have employed to implement your strategies. Did the process deliver the desired results? What were the winners and what were the losers? Best 2 investments (and why) Worst 2 investments (and why) Discuss buys and sells each week with reasons. Highlight the last 2 weeks for presentation Discuss sectors invested in with reasons Show final share holdings, total worth, number of shares and closing price What you have learned from the share game Any other issues Written Submission requirements The written submission is due on the day of the final oral presentation to class. Note: Because of the nature of this report and the comparatively short time frame following the completion of the game and final presentation, you should start preparing your report well before the end of the game. I strongly recommend that you have determined what you wish to include in the report, have a draft prepared and use the last few days completing the report. Your written submission is to be maximum of 2,500 words and should cover the following: 1. What were the investment objectives that you set yourselves either at the start of the game or during the game? What was your reasoning behind these objectives? 2. Did these objectives change during the game? If so why and how did they change? 3. What strategies did you employ to achieve your objectives? Did these strategies change during the course of the game? If so why and how? 4. How did you handle the question of risk ? 5. What methodologies did you develop to implement those strategies? Include the following: What soft and hard tools did you use or develop to assist you in the implementation of your strategy. What research did you do in making your decisions? List the sources of all research, include both hard and soft sources and addresses where possible. What was the decision making process you used in relation to share selection? Did you develop rules, if so what were they? What was the decision making process you used in relation to holding/ selling shares? What rules if any did you develop, if so what were they? How did you integrate the soft and hard tools in the decision making process? 6. How would you rate the success of your process given the short time period involved in the game? Would you expect that you would be more successful if you had more time? If so why? How could you improve the process? If you were a long-term investor how would the process you have developed be different? 7. What are the key learnings from the work you have done over the period of the game? Note: The word limit is tight and you are not expected to write a book. Many of the points you need to cover can be adequately handled in bullet point form. Acknowledgement is made and thanks given to Mr Bruce Cook, teacher VU, for the substantive design of this assessment.
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