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FT5009 Assignment 2
Pandemic, surging interest rate, and trade war, present a volatile market. Facing the chaos, let’s take a
step back and look at what is happening in the market.

Requirements and Evaluation (15%)
1. Stocks used are from US listed stocks with data from 2015-01-01 to 2024-12-31.
2. Identify 5 US listed stocks with minimum market cap of UGD 10 billion and each from a
different sector. At least one of the stock to have negative return over the 10-year history and at
least 3 stocks to have positive return over the 10-year history. (1%)
3. Plot the normalized daily price of each 5 stocks together with the relevant market index. (1%)
4. Find the annualized return and annualized volatility of the stocks and the market index. (1%)
5. Build 2 new indexes on the 5 stocks with the below weight calculation methods. (2%)
a. Equal weighted
b. Price weighted
6. Plot the 2 indexes and market index in point 5 and compare their return and volatility. (1%)
7. Using stocks with positive 10-year return from point 2, simulate 10,000 portfolios with
randomized weights. (2%)
8. Plot all the portfolios and identify the minimum variance portfolio and the Market Portfolio A.
(1%)
9. Identify the appropriate risk free rate to use and plot the capital market line on the plot. (2%)
10. Re-build the Market Portfolio B to include all the 5 stocks in point 2. (2%)
11. Compare and discuss the alpha and beta values of the 5 stocks and Market Portfolio A. (2%)

Deadline
1. 23:59 hours, 28th Sep 2025.

Submission Instructions
2. Submit via Canvas by the deadline. Late submission will be penalised.
3. Zip all files into one zip file and with naming format “Assignment_x_Group_x”. Group number
should be the same as the project groups you are in on Canvas. No extra folder is needed inside
the zip file.
4. Python code should be executable and well documented. Both .py or .ipynb files are acceptable.
5. Your report should document your methodology, analysis, and findings clearly and concisely,
including all visualizations and statistical test results (if any). The report should be well formatted
in A4 size pdf format with no more than 5 pages. In your report, please put all group members’
name and matric number.

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