Q) Suppose you have Rs. 10,00,000 to invest in stock market.

Form different portfolio individually (You

need to purchase at least 10 stocks that are traded in Nepal Stock Exchange for forming a portfolio). You
are required to compute daily return on each stock included in your portfolio. Also compare your
average portfolio return with NEPSE average return for your study period.

• Note while calculating daily return use 7 days trading price. (Use SPSS or Excel program as per
your convenience).

• Prepare a report and submit.

Solution: First of all, let’s calculate average 7 day return from NEPSE index.

Date NEPSE Value (in HPR (in %)

Rs)
12-03-19 1163.26 None
13-03-19 1150.1 -1.13130341
14-03-19 1155.46 0.466046431
17-03-19 1161.45 0.518408253
18-03-19 1153.98 -0.64316157
19-03-19 1147.15 -0.59186468
21-03-19 1140.6 -0.57098026
24-03-19 1134.8 -0.5085043
Total -2.46136
Average HPR -0.351623

Therefore, the 7-day average NEPSE index return is -0.351623 %.

Note: Formula for HPR is,

Holding Period Return (HPR) = (Final value of NEPSE index- Initial Value of NEPSE index)/ Initial Value
of NEPSE index*100%
Now, we need to calculate the return from our portfolio. We have Rs. 10 lacs which we need to invest in
10 different listed companies in NEPSE. Our investment portfolio is given below:

S.N Traded Companies Invested amount (in Weights

Rs)
1 ADBL 100000 0.10
2 AKJCL 100000 0.10
3 APCL 100000 0.10
4 AMBSL 100000 0.10
5 AKPL 100000 0.10
6 AVHDCL 100000 0.10
7 ALBSL 100000 0.10
8 ALICL 100000 0.10
9 BOKL 100000 0.10
10 BHCL 100000 0.10
Total 1000000 1

The portfolio return is calculated as below:

Date Traded Companies Closing Price of HPR (in Portfolio Return (in
stock (in Rs) %) %)
12-Mar- ADBL 305 None
19 AKJCL 80
APCL 140
AMBSL 660
AKPL 193
AVHDCL 108
ALBSL 321
ALICL 398
BOKL 254
BHCL 94
13-Mar- ADBL 301 -1.31148 -0.62142568
19 AKJCL 82 2.5
APCL 134 -4.28571
AMBSL 631 -4.39394
AKPL 178 -7.77202
AVHDCL 106 -1.85185
ALBSL 349 8.722741
ALICL 396 -0.50251
BOKL 250 -1.5748
 BHCL 98 4.255319
14-Mar- ADBL 302 0.332226 1.042929478
19 AKJCL 85 3.658537
APCL 137 2.238806
AMBSL 633 0.316957
AKPL 178 0
AVHDCL 106 0
ALBSL 366 4.87106
ALICL 397 0.252525
BOKL 252 0.8
BHCL 96 -2.04082
17-Mar- ADBL 302 0 1.409955807
19 AKJCL 84 -1.17647
APCL 139 1.459854
AMBSL 640 1.105845
AKPL 180 1.123596
AVHDCL 105 -0.9434
ALBSL 402 9.836066
ALICL 401 1.007557
BOKL 251 -0.39683
BHCL 98 2.083333
18-Mar- ADBL 301 -0.33113 -0.618405787
19 AKJCL 83 -1.19048
APCL 134 -3.59712
AMBSL 660 3.125
AKPL 175 -2.77778
AVHDCL 103 -1.90476
ALBSL 422 4.975124
ALICL 396 -1.24688
BOKL 248 -1.19522
BHCL 96 -2.04082
19-Mar- ADBL 298 -0.99668 0.526804143
19 AKJCL 82 -1.20482
APCL 135 0.746269
AMBSL 660 0
AKPL 170 -2.85714
AVHDCL 104 0.970874
ALBSL 464 9.952607
ALICL 398 0.505051
BOKL 246 -0.80645
BHCL 95 -1.04167
21-Mar- ADBL 296 -0.67114 -0.426573896
19
AKJCL 82 0
APCL 131 -2.96296
AMBSL 652 -1.21212
AKPL 173 1.764706
AVHDCL 103 -0.96154
ALBSL 487 4.956897
ALICL 389 -2.26131
BOKL 244 -0.81301
BHCL 93 -2.10526
24-Mar- ADBL 293 -1.01351 -1.55129455
19 AKJCL 79 -3.65854
APCL 132 0.763359
AMBSL 621 -4.7546
AKPL 167 -3.46821
AVHDCL 101 -1.94175
ALBSL 492 1.026694
ALICL 381 -2.05656
BOKL 243 -0.40984
BHCL 93 0
Total -0.238010485 %
Average Portfolio Return -0.034001498 %

Therefore, the 7-day average portfolio return is -0.034001498 % which is far lesser than 7-day average
NEPSE index return which is -0.351623 %.