Each student is required to build a portfolio of a maximum of 3 stocks selected from the Jamaica Stock Exchange Main Market or Junior Market. Each group is assigned a hypothetical sum of J$ 20,000,000 for investment.

 Financial Markets and Investments:

Course Work:

This project is worth 30 percent of the final exam mark

 Assignment Due Date :   June 30, 2026

 Presentation:

 The project should be presented in a professional manner with the document at least in standard word format. The ID # of student should be on the cover page. Late projects will not be accepted.

 Overview:

Each student is required to build a portfolio of a maximum of 3 stocks selected from the Jamaica Stock Exchange Main Market or Junior Market. Each group is assigned a hypothetical sum of J$ 20,000,000 for investment. The following assumptions are to be used.

• Investment Amount: J$ 20,000,000.00. All amount of the money should be invested.
• Number of Stock per Portfolio: Maximum 3
• Start Date: 1^st April 2026. That is the investments are made in the stocks on April 1, 2026.
• End Date: March 31, 2027. Date when the investment in the stocks matures.
• Allocation: Investment in any one stock should not be greater than 40% of the Portfolio. Each group will use its discretion to determine how investments are allocated between the stocks. Investment decisions should be supported by quantitative and qualitative reasoning.

Project Requirement:

Each student is required to carry out the following analysis.

1. Section I [15 marks]:

1. Select a maximum of 3 stocks for your portfolio and give rationale for selecting the stocks (e.g. the relative P/E ratio, Dividend Yield (DY), Earnings per Share (EPS), Business Strategy/Growth Prospect).
2. Construct a portfolio by allocating investment at your discretion into each stock selected.
3. Calculate the return on each stock chosen over the period (1^st July 2025 – 31st December 2025). The data used should be weekly data points- i.e. the closing selling price of the stock at the end of each week over the 6-month period. This data is available on the website of the Jamaica Stock Exchange.
4. Calculate the variance and standard deviation of each stock (using weekly data)
5. Using the answers in 2 & 3 above. Calculate the expected return on the portfolio

Assume that the portfolio can be said to have the following parameters:

Calculate the Portfolio Standard Deviation and Variance using a portfolio of only two of the stocks, with the investment allocation split at your discretion.

2. Section II: Plot the following graphs [5 marks]:

1. Graph together the stocks in your portfolio and explain if they are correlated.
2. Graph any two stocks in your portfolio with the JSE index for the period and identify the degree of correlation.

Explain why the concept of correlation is important in portfolio management.

3. Section III [10 marks]:

1. What impact is the creation of a regional stock exchange expected to have on the regional capital markets, clearly outline how this will impact market efficiency and impediments?

Information Source:

Most of the information for this project can be obtained from the website of the Jamaica Stock Exchange (www.jamstockex.com). The Financial Gleaner: Publish on Fridays

The website of local brokers, e.g. Jamaica Money Market Brokers, Scotia Investments, NCB Capital Markets, etc.

Note:

Please make sure to outline in your paper any shortcomings/challenges (e.g. data) that you encountered. The Lecturer is available to provide additional clarification if needed. Questions from the students should be collated by the Class Representative and sent to the Lecturer to prevent each student sending individual questions and to ensure that clarifications are shared across the entire class.