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 daystrading 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.

S.N. Date NEPSE Value (in Rs) HPR (in %)

1 31-Mar-19 1,143.59 -
2 28-Mar-19 1,143.10 -0.042848
3 27-Mar-19 1,142.61 -0.042866
4 26-Mar-19 1,140.72 -0.165411
5 25-Mar-19 1,138.67 -0.179711
6 24-Mar-19 1,134.80 -0.33987
7 21-Mar-19 1,140.60 0.511103
8 19-Mar-19 1,147.15 0.574259
Total HPR 0.314657
Average HPR 0.044951

Therefore, the 7-day average NEPSE index return is 0.044951%.

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:

Invested amount
S.N. Security Name Symbol (Rs) Weights
Nepal Doorsanchar Comapany
1 100,000.00 0.1
Limited NTC
2 Nepal Investment Bank Limited NIB 100,000.00 0.1
3 Nabil Bank Limited NABIL 100,000.00 0.1
4 Nepal Life Insurance Co. Ltd. NLIC 100,000.00 0.1
5 Standard Chartered Bank Limited SCB 100,000.00 0.1
6 Everest Bank Limited EBL 100,000.00 0.1
7 Himalayan Bank Limited HBL 100,000.00 0.1
8 NIC Asia Bank Ltd. NICA 100,000.00 0.1
9 Nepal SBI Bank Limited SBI 100,000.00 0.1
10 NMB Bank Limited NMB 100,000.00 0.1
Total 1,000,000.00 1
 The portfolio return is calculated as below:

Closing Portfolio
HPR(in
S.N. Date Security Name Symbol Price in Return (in
%)
(Rs) %)
Nepal Doorsanchar Comapany
1 687
31-Mar-19 Limited NTC
2 31-Mar-19 Nepal Investment Bank Limited NIB 528
3 31-Mar-19 Nabil Bank Limited NABIL 712
4 31-Mar-19 Nepal Life Insurance Co. Ltd. NLIC 1093
5 31-Mar-19 Standard Chartered Bank Limited SCB 565
6 31-Mar-19 Everest Bank Limited EBL 561
7 31-Mar-19 Himalayan Bank Limited HBL 458
8 31-Mar-19 NIC Asia Bank Ltd. NICA 400
9 31-Mar-19 Nepal SBI Bank Limited SBI 387
10 31-Mar-19 NMB Bank Limited NMB 328

Closing Portfolio
HPR(in
S.N. Date Security Name Symbol Price in Return (in
%)
(Rs) %)
Nepal Doorsanchar Comapany
1 28-Mar-19 Limited NTC 685 -0.291121 0.15791228
2 28-Mar-19 Nepal Investment Bank Limited NIB 530 0.3787879
3 28-Mar-19 Nabil Bank Limited NABIL 714 0.2808989
4 28-Mar-19 Nepal Life Insurance Co. Ltd. NLIC 1099 0.5489478
5 28-Mar-19 Standard Chartered Bank Limited SCB 568 0.5309735
6 28-Mar-19 Everest Bank Limited EBL 558 -0.534759
7 28-Mar-19 Himalayan Bank Limited HBL 460 0.4366812
8 28-Mar-19 NIC Asia Bank Ltd. NICA 398 -0.5
9 28-Mar-19 Nepal SBI Bank Limited SBI 391 1.0335917
10 28-Mar-19 NMB Bank Limited NMB 327 -0.304878

Closing Portfolio
HPR(in
S.N. Date Security Name Symbol Price in Return (in
%)
(Rs) %)
Nepal Doorsanchar Comapany -
1 27-Mar-19 Limited NTC 680 -0.729927 0.41321749
2 27-Mar-19 Nepal Investment Bank Limited NIB 528 -0.377358
3 27-Mar-19 Nabil Bank Limited NABIL 709 -0.70028
4 27-Mar-19 Nepal Life Insurance Co. Ltd. NLIC 1095 -0.363967
5 27-Mar-19 Standard Chartered Bank Limited SCB 570 0.3521127
6 27-Mar-19 Everest Bank Limited EBL 556 -0.358423
7 27-Mar-19 Himalayan Bank Limited HBL 455 -1.086957
8 27-Mar-19 NIC Asia Bank Ltd. NICA 398 0
9 27-Mar-19 Nepal SBI Bank Limited SBI 390 -0.255754
10 27-Mar-19 NMB Bank Limited NMB 325 -0.611621
 Closing Portfolio
HPR(in
S.N. Date Security Name Symbol Price in Return (in
%)
(Rs) %)
Nepal Doorsanchar Comapany -
1 26-Mar-19 Limited NTC 680 0 0.01542525
2 26-Mar-19 Nepal Investment Bank Limited NIB 527 -0.189394
3 26-Mar-19 Nabil Bank Limited NABIL 712 0.4231312
4 26-Mar-19 Nepal Life Insurance Co. Ltd. NLIC 1087 -0.730594
5 26-Mar-19 Standard Chartered Bank Limited SCB 564 -1.052632
6 26-Mar-19 Everest Bank Limited EBL 555 -0.179856
7 26-Mar-19 Himalayan Bank Limited HBL 461 1.3186813
8 26-Mar-19 NIC Asia Bank Ltd. NICA 398 0
9 26-Mar-19 Nepal SBI Bank Limited SBI 391 0.2564103
10 26-Mar-19 NMB Bank Limited NMB 325 0

Closing Portfolio
HPR(in
S.N. Date Security Name Symbol Price in Return (in
%)
(Rs) %)
Nepal Doorsanchar Comapany -
1 25-Mar-19 Limited NTC 674 -0.882353 0.06091913
2 25-Mar-19 Nepal Investment Bank Limited NIB 530 0.56926
3 25-Mar-19 Nabil Bank Limited NABIL 712 0
4 25-Mar-19 Nepal Life Insurance Co. Ltd. NLIC 1083 -0.367985
5 25-Mar-19 Standard Chartered Bank Limited SCB 568 0.7092199
6 25-Mar-19 Everest Bank Limited EBL 553 -0.36036
7 25-Mar-19 Himalayan Bank Limited HBL 459 -0.433839
8 25-Mar-19 NIC Asia Bank Ltd. NICA 398 0
9 25-Mar-19 Nepal SBI Bank Limited SBI 395 1.0230179
10 25-Mar-19 NMB Bank Limited NMB 322 -0.923077

Closing Portfolio
HPR(in
S.N. Date Security Name Symbol Price in Return (in
%)
(Rs) %)
Nepal Doorsanchar Comapany -
1 24-Mar-19 Limited NTC 678 0.5934718 0.58796543
2 24-Mar-19 Nepal Investment Bank Limited NIB 530 0
3 24-Mar-19 Nabil Bank Limited NABIL 712 0
4 24-Mar-19 Nepal Life Insurance Co. Ltd. NLIC 1072 -1.015697
5 24-Mar-19 Standard Chartered Bank Limited SCB 558 -1.760563
6 24-Mar-19 Everest Bank Limited EBL 555 0.3616637
7 24-Mar-19 Himalayan Bank Limited HBL 460 0.2178649
8 24-Mar-19 NIC Asia Bank Ltd. NICA 396 -0.502513
9 24-Mar-19 Nepal SBI Bank Limited SBI 385 -2.531646
10 24-Mar-19 NMB Bank Limited NMB 318 -1.242236
 Closing Portfolio
HPR(in
S.N. Date Security Name Symbol Price in Return (in
%)
(Rs) %)
Nepal Doorsanchar Comapany
1 21-Mar-19 Limited NTC 677 -0.147493 0.4501604
2 21-Mar-19 Nepal Investment Bank Limited NIB 530 0
3 21-Mar-19 Nabil Bank Limited NABIL 710 -0.280899
4 21-Mar-19 Nepal Life Insurance Co. Ltd. NLIC 1073 0.0932836
5 21-Mar-19 Standard Chartered Bank Limited SCB 571 2.3297491
6 21-Mar-19 Everest Bank Limited EBL 552 -0.540541
7 21-Mar-19 Himalayan Bank Limited HBL 462 0.4347826
8 21-Mar-19 NIC Asia Bank Ltd. NICA 395 -0.252525
9 21-Mar-19 Nepal SBI Bank Limited SBI 392 1.8181818
10 21-Mar-19 NMB Bank Limited NMB 321 0.9433962

Closing Portfolio
HPR(in
S.N. Date Security Name Symbol Price in Return (in
%)
(Rs) %)
19-Mar- Nepal Doorsanchar Comapany
1 19 Limited NTC 673 -0.590842 0.67199454
19-Mar-
2 19 Nepal Investment Bank Limited NIB 535 0.9433962
19-Mar-
3 19 Nabil Bank Limited NABIL 723 1.8309859
19-Mar-
4 19 Nepal Life Insurance Co. Ltd. NLIC 1097 2.2367195
19-Mar-
5 19 Standard Chartered Bank Limited SCB 577 1.0507881
19-Mar-
6 19 Everest Bank Limited EBL 548 -0.724638
19-Mar-
7 19 Himalayan Bank Limited HBL 465 0.6493506
19-Mar-
8 19 NIC Asia Bank Ltd. NICA 399 1.0126582
19-Mar-
9 19 Nepal SBI Bank Limited SBI 392 0
19-Mar-
10 19 NMB Bank Limited NMB 322 0.3115265
Total Portfolio 0.20253993
Average Portfolio Return 0.02893428

Therefore, the 7-day average portfolio return is 0.02893428 % which is lesser than 7-day average NEPSE index
return which is 0.044951%.