Virtual Portfolio Project Finance 450 Quarterly (Final) Report Comments

Organization Introductory letter to investors / stakeholders Table of contents Introductory section Middle section Final section

Letter to Investors Assume I am your largest and best informed investor, for both your management group and the portfolio This is your first quarterly report to me – describe what you think is relevant for me to know about your activities, both in terms of getting your management team up-and-running and in terms of the management and performance of your team’s portfolio (In writing this letter, keep in mind that not only am I your largest investor, but I am also your professor who wants to see that you were able to learn something from this project!)

Letter to Investors Some specific questions to ponder: –How well did you perform as a team? –How well did your portfolio perform? –What challenges did you face? –What do you think worked for you? What do you think didn’t work? –What will you change / do differently in future periods? What will you keep the same? –What did you learn from the process?

Introductory Section Items to include and/or describe: –Group name –List of group members’ names –Mission statement –Objectives –Constraints and appropriate benchmark

Middle Section Describe / document the four steps of the portfolio management process that you conducted throughout the quarter ( see General Comments and Guidelines, as well as Reilly & Brown ): 1.Portfolio construction 2.Portfolio management 3.Portfolio revision 4.Portfolio evaluation and performance assessment

Performance Assessment Some specific items to include are: –What is the beta for your portfolio? Is this beta consistent with your mission, objectives, and economic outlook? –What is the Treynor Ratio for your portfolio? How does this compare to the Treynor Ratio for your benchmark? –What is the estimated Jensen’s alpha for your portfolio? –Analysis of this performance Did you have “good” or “bad” performance? What led to the performance you obtained (qualitative discussion and performance attribution analysis)?

Final Section Extension of performance analysis: –What is your largest company holding (long or short)? How has it performed? Briefly discuss the prospects for this company, drawing on research from at least three resources (incl. Value Line) Given these prospects, is the weight allocated to this holding consistent with your mission? If not, why not? What changes would you anticipate making in this holding, if any? –What is your largest industry holding? How has it performed? Again, drawing on at least two resources, discuss the industry’s prospects Given these prospects, is the weight allocated to this holding consistent with your mission? If not, why not? What changes would you anticipate making in this holding, if any?