Reference no: EM132376025

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: February 2014 to February 2016; Period 2: October 2016 to October 2018) separately in two separate tables.

b) Calculate the return of share prices (r_j) and market return (r_m) (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, (r_j - R_F) and (r_m - R_F).

c) Calculate the mean, standard deviation, variance and correlation coefficient for (r_j - R_F) and (r_m - R_F) separately (for two sub-period in a table-see next page) and comment on the result.

d) Estimate beta (β_j) for your selected company for the two sub-periods.

e) Explain the value of beta that you have calculated.

f) Provide a brief description of the company.

g) Why the estimated value of beta is different for two sub-periods?

(Note: The assessment should be typed, printed and submitted)

Instructions for assessment 2:

Data collection from YahooFinance:

1. Go to the Yahoo Finance Web page:

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. i) Click "Historical Prices" icon.ii) Frequency: "Monthly"; iii) Time period set date, click "YTD"

4. Set Data Range: Start date: January 2014 (to get the return from February you need the data from January; i.e. one period ahead) and end date: February 2016.Click, "Apply"

5. In the bottom of the page click, "Download data". Therefore, download the data and save.

6. 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)

7. Similarly, 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")

8. Follow the CAPM lecture note and divide the returndata for two sub-periods:
a) Period 1: February 2014 to February 2016; b) Period 2: October 2016 to October 2018.(Note: to get the market return (rm) forFebruary 2014, students need the All Ordinaries index (market index)and the stock price for the chosen company data from January 2014)

9. Risk free monthly rate of interest (already expressed in %) is given in the assignment. (Please do not change this data).

10. Set the date on monthly basis. (For example, type Feb-15, Mar-18 ---------)

11. Students are allowed to use Microsoft excel or calculator for this assessment.

12. You must write the name of the Company you have selected on the first page.

13. Please read carefully the relevant lecture (CAPM) before you start the assessment.

14. Please give page number of your assessment. (Final result: 4 decimal places).

15. For late submission (will be counted from your tutorial time) 5% marks will be deducted for each day unless approved extension.

16. Use excel for the calculation. If you need help, please see me.

17. To answer part f) and g) student should read the company report and relevant document (such as economic activities etc).

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 (g). Students are advised to start the assignment just after week 4 lecture. Late submission without valid reason will not be accepted.

Attachment:- Assignment Questions.rar