Assessment 2: Report (20%)
(This assessment must be submitted (print copy-A4 size) between 1 October to 5 October 2018 (week 10) to your Lecturer/Tutor during Workshop. In case of illness, apply for special consideration. Only HARD COPY with assignment cover sheet of the assignment will be accepted)
Q1. Collect the data from “Yahoo Finance” and answer the following questions (using the instructions given in the next page):
a) Collect the market price index (All Ordinaries), Share price for a company (as per instructions given in page 2) and display the data for two sub-periods (Period 1: June 2014 to February 2016; Period 2: February 2016 to October 2017) separately in a table. (2 marks)
b) Calculate the return of share prices and market return (from market price index). Display the calculated returns along with the risk free rate of return (given in a separate excel file) in a table for two sub periods. Calculate and tabulate, and. (2 marks)
c) Calculate the mean, standard deviation, variance and correlation coefficient for and separately (for two sub-period in a table-see next page) and comment on the result. (2+2=4 marks, 2 for calculation 2 for the comment)
d) Estimate beta for your selected company for the two sub-periods.
(1+1=2 marks)
e) Explain the value of beta that you have calculated.
(1.5+1.5=3 marks-1.5 for each sub-period)
f) Provide a brief description of the company. (2 marks)
g) Why the estimated value of beta is different for two sub-periods?
(2.5+2.5=5 marks)
(Note: The assessment should be typed, printed and submitted)
Instructions for assessment 2:
Data collection from Yahoo Finance:
1. Go to the Yahoo Finance Web page:
https://au.finance.yahoo.com/
2. On the right hand side enter Symbol or type the name of the Company and click “Look up”. For example: Medibank Private. The symbol will come up, otherwise see the list (excel file) of companies and you will find the symbol.
Note: Choose a company from the list provided in the assignment (see the excel file). If your Surname starts with ‘M’, choose a Company whose name starts with ‘M’. e.g. “Myer Holdings”. You may not get the data for the specified periods for some new companies (e.g. for Medibank Private). In that case choose another company.
3. Click “Historical Prices” icon.
4. Next, Click “Monthly” icon.
5. Set Data Range: Start date: June 2014 and end date: October 2017. Click, “Apply”
6. In the bottom of the page click, “Download data”. Therefore, download the data and save.
7. Keep only “Date” and the “Adj Close”. This will be the share price for your selected firm.
(Please ignore the dividend paid. That is, delete dividend for each period)
8. Follow the same steps from 1. And collect the data for the same period for “All Ordinaries”. This will be your market index. (convert the data from oldest to newest using “sort” or “filter”)
9. Follow the CAPM lecture note and divide the
return
data for two sub-periods:
a) June 2014 to February 2016 and b) March 2016 to October 2017.
(Note: to get the market return (rm) for March 2016, students need the All Ordinaries index data from February 2016)
10. Risk free monthly rate of interest (already expressed in %) is given in the assignment.
(Please do not change this data).
11. Set the date on monthly basis. (For example, type Feb-15, Mar-18 ---------)
12. Students are allowed to use Microsoft excel or calculator for this assessment.
13. You must write the name of the Company you have selected on the first page.
14. Please read carefully the relevant lecture (CAPM) before you start the assessment.
15. Please give page number of your assessment. (Final result: 4 decimal places).
16. For late submission (will be counted from your tutorial time) 5% marks will be deducted for each day unless approved extension.
17. Use
excel
for the calculation. If you need help, please see me.
18. To answer part f) and g) student should read the company report and relevant document.
Note: The data should arrange from
oldest to the newest dates. For example: Sept-15 will come before Oct-15. Return data should be in percentage (%). Answer each part of the questions separately starting from (a) to (f).
If you think that you cannot attend tutorial between 1 October 2018 to 5 October 2018, please submit your report one week before. Otherwise please make arrangement with your lecturer/tutor. Name of the tutors will be posted later on vUWS.