Student needs help :-/



You will probably all hate me for the following question.

As part of a finance module at university I have to undertake a virtual trader assignment and I can't stress enough how valuable any bit of advice will be as no support is available from my crappy university (and they put their fees up!!! luckily doesn't effect me).

The brief:

You are a group of Portfolio Managers who will be managing 2 portfolios of shares. You have been asked by the senior financial executive to produce a report regarding the performance of your portfolios.You need to set up 2 portfolios using - Each portfolio will have an initial investment of £100,000.

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.


Now obviously I need help with portfolio 2 I have an understanding of CAPM but no idea of how to implement it to virtual trader and the FTSE 100.

Thanks and sorry for this question in advance.
Well if you need to use CAPM a good starting block would be to analyse each of the components of the formula. I'm sure your assignment will write itself if you take that approach.

Good luck