Consider yourself the fund manager of a small, brand new investment fund. Your starting endowment is

as follows:

Ø 2 million in UK pounds sterling (GBP)

Ø 2 million in US dollars (USD)

Ø 10 million in Japanese yen (JPY)

Ø 3 million euros (EUR)

Your opening portfolio must be registered for initial validation no later than 9pm on Friday 19th January

2018, and must be liquidated on or before the end of trading on Friday 13th April 2018.

Rules of engagement:

You may invest in any financial or other asset legally available to funds resident in the United Kingdom.

Any funds not invested will be assumed to remain in (zero-return) cash.

Because this is a learning exercise, you are strongly encouraged to invest as widely as possible, both

across assets and geographically.

For simplicity, assume all transactions are not subject to taxation.

All transactions are subject to commission:

Ø All purchases/sales incur a 0.5% commission

Ø This includes foreign exchange transactions

You are responsible for your fund’s up-to-date book-keeping (a spreadsheet is quite helpful for this!),

which may be audited at any time. Note that you will be called upon in class to discuss your portfolio

and any recent transactions.

You are required to mark-to-market each of your individual holdings on a daily basis using closing prices.

All trades must be registered on the day they occur.

All trade registrations must be accompanied by a brief description of the underlying rationale for the

trade. This should include some application of Finance theory either directly or indirectly if you are using

analysts’ recommendations.

Failure to comply with any of the regulations will mean you will become subject to an investigation,

which can lead to a severe fine (and grade reduction). There is no right of appeal.

When submitting your project, it must consist of each of the following items:

• A cover sheet with your name, the course code and title, date of submission, and your ‘Target’

company

• An Executive Summary (5%)

• Your fund “mission statement” (5%)

• A concise description of those markets and sectors in which you have invested, and why (this

should relate to your mission statement) (15%)

• A time series graph showing your daily portfolio balance (can be in one and/or several

currencies) (10%)

• An overall report on the performance of your fund. As well as a broad explanation on the overall

performance of your fund, there should be some explanation as to which assets did and did not

perform as expected (and why). You must also include your final balance at liquidation (in GBP),

including how much profit (or loss) you have made, as well as the rate of return on your

portfolio in both annualised and raw form (30%)

An Appendix showing a time-series table of every trade you have made, including how many

securities (or other assets) you have bought/sold, the cost/receipts, and any commissions paid.

You should also include your balances (in the respective currencies) following each trade

(15%)

• An Appendix listing each item you have bought/sold, including brief theoretical explanation for

the transaction and its timing (15%)

• A complete and properly formatted (Harvard) Bibliography (5%)

All items should be uploaded to Blackboard on or before midnight on Sunday, 15th April 2018 and a hard

copy submitted on or before 8:50am the next day.

Stocks to Invest in

GBP (£):

• Invest 50% of currency on Company Stocks:

• WH Smith, Tesco and Barclays

• 25% in Islamic Bonds

• 25% in Crypto

USD ($):

• Invest 60% in company stocks

o Manchester United, Dell and Nike

• Invest 20% in bonds

• Invest 20% in Crypto

Yen (¥):

• Free choice on what to invest the currency into

Euro (€):

• Also, free choice on what to invest the currency into