1. 1 Karlsruhe-Liverpool Project Introduction to Task A

2. 2 The Scenario You are employed by a team of young investment consultants, which manages personal share portfolios for small private investors. The company is growing, and is looking to expand its business and to attract new custom. It is keen to investigate new products and practices

3. 3 The Tasks Task A will be to create and monitor a portfolio of shares to match a given description. Task B will be to manage a portfolio of shares worth £100,000 over a three-month period. Task C will be to create a prototype version of a decision tool to help advise investors. All tasks will involve the creation and use of Spreadsheets.

4. 4 The Spreadsheets There are three spreadsheets which accompany Task A KarlsruheInvestigate.xls KalsruheTasks.xls KarlsruheEvaluate.xls There are three spreadsheets which accompany Task A KarlsruheInvestigate.xls KalsruheTasks.xls KarlsruheEvaluate.xls

5. 5 Investigate.xls The spreadsheet simulates a small Stock Exchange consisting of 8 companies with a range of share values. Share prices are generated over the course of one year (250 working days)

6. 6 Investigate.xls These buttons control which share is being examined These bars control the different market conditions: High Confidence means Shares increase High Variability means the shares tend to move up and down rapidly. These bars control the different market conditions: High Confidence means Shares increase High Variability means the shares tend to move up and down rapidly.

7. 7 The Changing Value of the Shares The share prices are generated using a complex algorithm based on the following factors: »The Confidence of Investors »The Nervousness of Investors »Current Share Price »Recent History of the Share Price »The ‘Natural Variability’ of the share price »The Financial Position of the company

8. 8 Investigate.xls If this box is checked, then a new simulation is carried out every time a button is clicked This will carry out a new simulation regardless of whether the box is checked This allows you to see the actual data that is currently being used

9. 9 Investigate.xls The actual data that is currently being used (prices shown at the end of the week)

10. 10 Task A1 Investigate how the shares behave under different market conditions The main part of this task is to determine the confidence level needed to ensure shares rise in value. (Different for each share) Confidence = 80% Confidence = 20%

11. 11 Table 1 Table 1 requires you to work out, for each company: A typical starting value An upper price limit A lower price limit Market confidence level needed to ensure shares rise in value Impression of how variable the shares are in comparison to others. Upper Limit Lower Limit To do this, you will need to do lots of simulations, keep records and calculate averages.

12. 12 Table 2 Table 2 requires you to summarise, for each company what happens under Good market conditions Average market conditions Poor market conditions

13. 13 Share Portfolio Construction The main purpose of this activity is to devise a portfolio of shares around £1000 which fits one of the following descriptions: »Steadfast: A safe investment, even under very poor market conditions »Moneybuilder: Relatively safe, but under good conditions we would expect a healthy profit »Prospector: Maximise profit when market is high, but attempt to minimise losses »Speculator: Take full advantage of high-risk, high profit shares in the expectation of good market conditions

14. 14 Portfolio Construction After you have constructed the portfolio, you will be expected to: »Create a ‘prospectus entry’ for the portfolio showing the number of shares of each type and the portfolio cost »Create an end-of-year forecast for the portfolio based on different market conditions

15. 15 Portfolio Tracking The main IT task here is to create a portfolio tracking spreadsheet which keeps a week-by- week record of the portfolio over a one-year period, and includes summary statistics such as graphs, trendlines, averages etc.

16. 16 Portfolio Investigation A further part of the task asks you to create a spreadsheet which allows you to see how the portfolio will behave under a variety of market conditions, and to produce a graph which summarises the results

17. 17 Portfolio Evaluation The final activity is the evaluation spreadsheet which will allow you to see how well your portfolio matches the requirements… or not!

18. 18 Working in Teams For this task, and the two that follow, you will need to work in teams of about four people. Each task consists of a range of activities, and will need to be split up if you are to complete them succesfully. The final activity in each task is the Assessment. This is for Hope students intending to complete the optional Karlruhe module.