PORTFOLIO CONSTRUCTION AND EVALUATION

Abstract

The aim of this project is to construct effective portfolio for the large cap companies. This study enables to know the performance of Sensex thirty companies having larger market capitalization. The analysis given on this project is on the basis of risk & return and on Sharpe index model. This project suggests which stock should be selected amongst large cap industries so as to construct an optimum portfolio. For this a brief profile of the companies are created. The stock price movement, beta values & closing index points of the companies for the past four year are collected for analysis. Risk free rate of return is calculated. All the values obtained are interpreted and analyzed using Sharpe’s single index model. After constructing the portfolio, returns of the constructed portfolio is compared with the market so as to evaluate its performance.