Introduction : The art and science of making decisions about investment mix and policy, matchin g investments to objectives,

asset allocation for individuals and institutions, and balancing risk against. Performance. It is a generally accepted principle th at a portfolio is designed according to the investor's risk tolerance, time fram e and investment objectives. The dollar amount of each asset may influence the r isk/reward ratio of the portfolio and is referred to as the asset allocation of the portfolio. Objective: To familiar the Securities Analysis and Portfolio tools and techniques to facili tate the managers in managing their portfolio To learn how the performance can be assessed. To learn which securities are the best and which securities are the worst for in vestment. To learn how CAPM can be used in the portfolio and measured the risk adjusted re sult. Methodology: Here, Government 360 Days T bill =8.5% Average Daily HPR Average ( selective securities HPR) Average percentage return Average Daily HPR*360 Annualized Return ((1+Avg daily HPR)^360)-1

Standard Deviation (Daily) STDEV( Average Daily HPR) Standard Deviation (Annualized) Standard Deviation (Daily)*((360)^(1/2)) Risk Premium Annualized Return-8.5% Reward to Variability Ratio Risk PremiumStandard Deviation (Annualized)

After calculated the RTV I select 3 securities and then calculate the 3 securiti es portfolio. For this I take the weight .Then calculate the , Measure Formula Expected return W1*E(R1)+W2*E(R2)+W2*E(R2) portfolio variance (w1)^2*(1 )^2+(w2)^2*( 2)^2+(w3)^2*( 3)^2+2*w1*w2* 1* 2*12+2*w 1*w3* 1 *3*13+2*w2*w3* 2* 3* 23 Standard deviation portfolio variance risk premium Expected return-8.5% RTV of portfolio. risk premium Standard deviation Then calculate 2securities portfolio. Expected Return of the Portfolio W1*E(R1)+W2*E(R2) Variance of the Portfolio (W1)^2*(1)^2+(W2)^2*(2)^2+2*W1*W2*1*2*12 Standa d Deviation of the Portfolio Variance of the Portfolio Risk Premium of the Portfolio Expected Return of the Portfolio-8.5% RTV of the Portfolio Risk Premium of the Portfolio/ Standard Deviation of the Portfolio

Then calculate the optimal portfolio. Weight (E rd-rf )*(e)^2-(E re-rf)*cov(rd,re)/ (E rd-rf )*(e)^2+(E re-rf)*(d)^2-( E rd- rf +E re-rf)*cov(rd,re) Expected return of the optimal portfolio raya+rbyb Variance of he optimal portfolio (Wa)^2*(a)^2+(wb)^2*(b)^2+2* Wa *wb*ab*ab Standa d deviation of the optimal portfolio Variance of he opimal porfolio Calculate the complete portfolio. Optimal Value /Weight for the Portfolio E(rp)-rf(.01*A*(p)^2) Investment in risk free asset 1- Weight for the Portfolio Expected return of the Complete portfolio Y E(rp)+(1-y)*rf Standard Deviation of the Complete portfolio Weight for the Portfolio Standard deviation of the optimal portfolio Finally calculate CAPM. Expected return Rf+(Rm-Rf)* Main Research Report The name of the securities Prime Textile Spinning mill Ltd,Prime Bank,Aftab Auto Mobile,Pubali Bank,Advance Chemical Industries Ltd,Relience Insurance Ltd,Aziz Pipe Ltd,AB Bank,Beximco Ph armaceticals Limited, Heidelberg Cement Bangladesh Ltd. 1ST PART PRIME TEXTILE SPNING MILL LTD PRIME BANK PUBALI BANK ADVANCED CHEMICAL INDUSTRIES LIMITED ED AZIZ PIPE LTD AB BANK BEXIMCO PHARMACEUTICALS BANGLADESH LIMITED. Expected return -4.75% 26.10% 21.59% 107.38% 21.34% 4.24% -1.57% RTV -11.76% 74.39% 61.26% 128.23% 82.46% 59.20% -4.09% AFTAB AUTO MOBILE RELIENCE INSURANCE LIMIT LIMITED HEIDELBERGCEMENT 44.28% -44.21% 24.28% -92.51% 77.99% 10.71%

From the above table we can see that Pubali bank, Advance Chemical Industries an d AB Bank expected return and RTV is higher than other company. 2nd Part Correlation Name PUBALI BANK ADVANCED CHEMICAL INDUSTRIES LIMITED AB BANK PUBALI BANK 1 0.001373641 0.011973424 ADVANCED CHEMICAL INDUSTRIES LIMITED 0.001373641 1 -0.027652543 AB BANK 0.011973424 -0.027652543 1 3 securities portfolio PUBALI BANK ADVANCED CHEMICAL INDUSTRIES LIMITED Weight 0.60 0.20 0.20 Expected return of portfolio 73.55% RTV of portfolio 101.15% Here weight is given based on RTV and correlation,the expected tfolio is73.55% And RTV is 101.15% 3rd Part considering the 2 security portfolio Weight for Pubali Bank 0.6 Weight for Advance Chemical or AB Bank 0.20 Weight for Advance Chemical 0.4 Weight for AB Bank or Pubali Bank 0.80 Expected Return of the Porfolio 72.96% Expected Return of the Expected Return of the Porfolio 0.91 AB BANK

return of the por

0.2 0.8

Weight f Weight f

Porfolio 23.69%

RTV of the Portfolio 126.60% RTV of the Portfolio 62.03% RTV of the Portfolio 122.87% After giving weight based on individual RTV, we get those expected re turn and RTV from the two Securities portfolio 4th Part Calculation of the Optimal & complete portfolio. Weight for Pubali Bank 0.16 Weight for Advance cemical 0.04 Weight for AB Bank 0.17 Expected reutrn of the optimal portfolio (P and A) 34.98% Expected reutrn of the optimal portfolio (A and AB) 24.18% Expected reutrn of the optimal portfolio (AB and p) 92.99% Standard deviation of the optimal portfolio( p and A) 25.52% Standard deviation of the optimal portfolio(A and AB) 30.02% Standard deviation of the optimal portfolio (AB and P) 69.52% Here we calculate the weight by using formula, and complete portfol io (AB and P) provide higher expected return 69.25%. Optimal Value /Weight for the Portfolio(P & A) 138.06% Optimal Value /Weight for the Portfolio(A &AB) 59.82% Optimal Value /Weight for the Portfolio(AB & P) 58.63% Expected return of the Complete portfolio(P & A) 45.25% Expected return of the Complete portfolio( A& AB) 17.68% Expected return of the Complete portfolio(AB & P) 57.83% Above the Calculation of the Optimal Value /Weight for the Portfolio by using formula BETA & Expected return of CAPM Annualized Market return=28.58% Using data analysis system run the regression. Then find out the BETA of the3 s ecurities. Beta value for Pubali Bank= -0.03104854 Beta value for Advance camical=-0.031664222 Beta value for AB Bank= -0.006684473 Expected return of Pubali Bank= 7.36% Expected return of Advance Cemical= 7.35% Expected return of AB Bank= 7.86% Here we can see that AB Bank provide higher expected return 7.86% than other two securities. Compare: Using capm Previous Name RTV PUBALI BANK -.76% ADVANCED CHEMICAL INDUSTRIES LIMITED AB BANK -.44% Name RTV PUBALI BANK 128.23% ADVANCED CHEMICAL INDUSTRIES LIMITED

-2.52%

82.46%

AB BANK 77.99% In previous RTV we can see that all are positive but after using CAPM we see that all are negative RTV Compare 3 security portfolio Current Previous Reward to Variabiity Ratio (Pubali,Advance Cemical,AB Bank) Reward to Variabiity Ratio(Pubali,Advance Cemical,AB Bank)

-1.20% 101.15%

In 3 security portfolio Previous RtV is higher than current. Because expected re turn is too poor than previous.

2 securities portfolio Current Previous Expected reutrn of the optimal portfolio ( Pand A) Expected reutrn of the optimal portfolio (A and AB) Expected reutrn of the optimal portfolio (AB and P) Expected reutrn of the optimal portfolio (P and A) Expected reutrn of the optimal portfolio (A and AB) Expected reutrn of the optimal portfolio (AB and p) Here we see that cted return Current Previous Expected return of the Complete portfolio(P & A) Expected return of the Complete portfolio( A& AB) Expected return of the Complete portfolio(AB & P) Expected return of the Complete portfolio(p& A) 34.98% Expected return of the Complete portfolio( A& AB) Expected return of the Complete portfolio(AB& P) 24.18% 92.99% 7.35% 7.86% 7.41% 7.35% 7.71% 7.46% 72.96% 23.69% 91%

in optimal portfolio all previous is higher than current expe

Here we see the same result again in complete portfolio that all previous is hig her than current expected return.