Sign In
Not register? Register Now!
Essay Available:
Pages:
11 pages/≈3025 words
Sources:
10 Sources
Style:
Harvard
Subject:
Accounting, Finance, SPSS
Type:
Coursework
Language:
English (U.K.)
Document:
MS Word
Date:
Total cost:
$ 61.78
Topic:

Analysis of Sharpe Ratio, Beta, Treynor Ratios, and Standard Deviation of Funds

Coursework Instructions:

Part 1:
Investment and Portfolio Management to Finance Students are required to answer both parts of this coursework.
Fidelity website provides data on the risk and return of its funds at www(dot)fidelity(dot)com . Click on the News and Research link, then choose Mutual Funds from the submenu. In the Search and Compare Funds section, search over All Asset Classes. On the next screen, click on Volatility and set the beta slider to 0.75 and answer the following questions.
1- Select five funds from the resulting list and compare the five funds according to their betas and then according to their standard deviations. (You will have to explain the Beta and standard deviation in your analysis)
(10 marks)
2- Do both lists rank the funds in the same order? How would you explain any difference in the rankings?
(10 marks)
3- Repeat the exercise to compare five funds that have betas greater than or equal to 1.50. Why might the degree of agreement when ranking funds by beta versus standard deviation differ when using high versus low beta funds?
(10 marks)
Part 2:
Morningstar has an extensive ranking system for mutual funds, including a screening program that allows you to select funds based on a number of factors. Open the Morningstar Web site at www(dot)morningstar(dot)com and click on the Mutual Funds link. Select the Fund Quickrank link in the Performance section. (Free registration is
required to access the site.) You could use the Quickrank screener for several purposes such as to find a list of large growth stock funds with the highest 1-year and 3-year returns.
For this assignment, you are required to select three of the funds that appear on both lists of the highest 1-year and 3-year returns. For each fund, you are advised to check their relevant Morningstar report and look in the Ratings & Risk section to perform the following tasks.
1- Find and explain the funds’ standard deviations. (10 marks)
2- Find and explain the funds’ Sharpe ratios. (10 marks)
3- Find and explain the funds’ Treynor ratio. (10 marks)
4- Find and explain (i) the standard index and (ii) the best-fit index. (10 marks)
5- Find and explain the relevant beta and alpha coefficients using both the standard index and the best-fit index. How do these compare to the fund’s
parameters?
(10 marks)
6- Look at the Management section of the report, was the same manager in place for the entire 10-year period? In your answer you need to comment briefly on the relationship between managers position stability and their relevant portfolios’ performances.
(10 marks)
7- Are any of these funds of interest to you? How might your screening choices differ if you were choosing funds for various clients?
(10 marks)
Formal requirements:
• You are expected to make full use of all academic sources, in particular peer reviewed academic journal articles. Other sources amongst others include books, periodicals, company publications etc. You may access most of the academic articles on Google Scholar.
• The assignment will be marked on the basis of a) the quality of the analysis provided and the connection of theory and practice, b) appropriate evidence and conclusion.
• The coursework is expected to be thoroughly completed and formatted.
• Present your essay in a suitable academic format
• Include a cover page (with word count), page numbers, table of content, explicit headings, and reference list.
• The essay should be clearly written in proper English, the use of any business/scientific jargon clearly explained.
• All sources should be cited and referenced using the Harvard referencing style:
• Formatting Guidelines: font size 12, text alignment: justify, line spacing: 1.5 or 2.

Coursework Sample Content Preview:

FUNDS, INVESTMENT AND PORTFOLIO MANAGEMENT TO FINANCE
(Your Name)
Course
Instructor’s Name
University
City and State of the University
Date
Word Count: 3801
Table of Contents Introduction. 4 Fund Selection and Comparison According to Betas and Standard Deviation. 4 Ranking the Funds in the Same Order 6 Comparing Five Funds with Betas Greater than or Equal to 1.50. 7 Three Funds that Appear on both lists of the Highest 1-year and 3-year Returns. 8 The Standard Deviation of the Funds. 8 The Sharpe Ratio of the Funds. 9 The Treynor Ratio of the Funds. 10 The Standard and Best-Fit Indices. 12 Standard Index and the Best-fit Index to calculate beta and alpha coefficients.    13 Management Section Report Analysis. 14 Recommendation Fund Selection. 15 Conclusion. 16 References. 17 Appendix. 18   Funds, Investment and Portfolio Management to Finance Introduction             Investment selection require thorough analysis by the investor or investment analysis to ensure that maximum return is obtained while risk is minimized. Risk measurement is based on the fund’s standard deviation and beta. In this analytical paper, two section are undertaken whereby section 1 requires selection of five mutual funds. The volatility of the funds in analyzed by selecting different degrees of betas. In the second section, three fund are selected based on the highest return achieved in 1-year and 3-year period. The analysis of the Sharpe ratio, beta, Treynor ratios and standard deviation for each of the three funds is done. The data for analysis is obtained through Fidelity and Morningstar website. An investment choice from the funds is considered based on the analysis undertaken. Fund Selection and Comparison According to Betas and Standard Deviation             The five funds selected, and the results are shown in Table 1. When measuring the risk of the fund, various parameters are used. However, volatility is the most applied metric in measuring fund risk. In measuring volatility, fund manager and analysts use standard deviation and beta. The beta of an investment is used to measure the systematic risk associated with the fund. Systematic risk is the risk that is inherent to the entire market and cannot be predicted or controlled by firm specific measures (Jagric, T., Podobnik, B., Strasek, S. and Jagric, V., 2015). Beta is therefore used in measuring the fund’s risk against a market index or the return volatility of the fund relative to the entire market. A higher beta (β > 1) implies that the fund’s returns are more volatility that the market while a low beat (β < 1) indicates that the return of the funds are less volatility than the market. On the other hand, a beta of one (β = 1) shows that the return of the fund varies in the same way as the market, i.e., the fund is as volatile as the market.              Based on the betas as a measure of fund investment risk as presented in Table 1, Fidelity Balanced Fund has the highest beta of 0.75 followed by American Fu...
Updated on
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now:
Order

👀 Other Visitors are Viewing These Harvard Coursework Samples:

HIRE A WRITER FROM $11.95 / PAGE
ORDER WITH 15% DISCOUNT!
Order Now