FN626: FINANCE LIVE

ASSIGNMENT 3: BITCOIN AND PORTFOLIO DIVERSIFICATION

Drawing on your modules to date and the Presentations made during Finance Live lectures, you are asked to complete the following individual project.

Project

“Given the returns bitcoin has offered in the past, and its correlations with other assets, the result could be a rush of cash into bitcoin, as even sensible investors consider putting small slices of their pension pots or portfolios into crypto for diversification”.

Why Bitcoin is up by almost 150% this year: Introducing the cockroach theory of crypto. The Economist (Finance and Economics, Buttonwood), December 18th, 2023.

You must prepare a report which discusses the remarks made in the Economist magazine. Drawing on your first semester modules, you are asked to provide a rigorous, evidence-based answer to whether cryptocurrencies provide diversification benefits for equity investors.

Your answer must make use of cryptocurrency and equities data from the Bloomberg Terminal.

All quotations, ideas, etc. should be fully and properly referenced in line with the referencing section

of your module handbook (see section 7.3). Similarly, the data sources used in the report must be

included in the notes to the Tables / Figures that use the data.

The report should not exceed 1,500 words (excluding references and Tables / Figures). Reports should

include a title page with the following information:

Title of the Report; Student name and number; Abstract; Date of submission; word count.

An Abstract is a short (100-150 words) summary of the goal and main findings of the report.

Submission Instructions

You are required to submit your report on the FN626 Moodle page no later than 12 noon, April 18th,

2024. Late penalties will be applied as per the Programme Handbook.

Your submission should consist of a single pdf file containing the entire report. Any supporting Tables

and Figures should be included in this document. The report should be word processed with double line

spacing and 12pt font.
The sample period of the data collected should be of the year 2018 to 2023. 2. The source of the data should only be from Bloomberg. 3. There should be 3 graphs.. showing 3 comparisons whereby all indicating the diversification effect of the bitcoin . 4. The first graph with one efficient frontier should be created with bitcoin & 3 or 4 of the indices. Second efficient frontier with just the 3 to 4 indices. 5. The second graph with one eff frontier with bitcoin and the 3 to 4 tech stocks and another eff frontier with just the 3 to 4 stocks 6. The third graph with one eff frontier with bitcoin and all other crypto’s and another eff frontier with just the other cryptos. need the report and excel sheet based on the below parameters