As a portfolio manager, Produce a report for a client who wishes to invest 200,000 in two portfolios of shares regarding the performance of your clients portfolios.

Your asset management firm have been approach by a high net worth client who wishes to invest 200,000 in two portfolios of shares. You are a group of Portfolio Managers who have been asked by your senior financial executive to produce a report for this client regarding the performance of your clients portfolios.

You need to set up 2 portfolios using Virtual Trader. Each portfolio will have an initial investment of 100,000 each and you must have invested all your initial money for both portfolios by Friday 11th December 2015. You can then buy and sell as many times as you wish until 11th March 2016.

Portfolio 1

You do not need to consider any particular theory for this portfolio. You can simply invest in companies in which you have an interest or companies that you believe will perform well on the London Stock Exchange over the next few months. It is suggested that you read the financial pages of the newspapers or relevant websites to help you with this task.

Portfolio 2

For this portfolio you need to use the Capital Asset Pricing Model which can be applied in a number of ways. The choice is yours.

The senior financial executive would like you to include the following in your report, which should be no more than 3,000 words in length:

(1)A critical analysis of the Capital Asset Pricing Model.
(2)A comparative analysis of the overall performance of both portfolios, including reference to specific share price fluctuations that occurred following events that affected
the entire Stock Market or events that affected individual companies.
(3)Recommendations as to what you would do differently in the future in order to improve the performance of your portfolios.