a. How would you adjust the closing price according to the dividend rate in Excel?

b. How would you adjust the return expectations? Do you add 5.5% for ANZ or subtract 5.5% for FMG for each daily returns?

You are to assess a 2-asset portfolio that consists of ANZ shares (ANZ) and Fortescue (FMG) shares. You have been given the historical prices of these companies over the past 2 years (this .) in order to analyse historical performance. Assume that the risk-free rate is 3.2% per year and the forward-looking market return is expected to be 8.2% per year. Forecast adjustments: - You note that the data you have used does not include dividend information, which you also want to include in your analysis. For ANZ, the annual dividend rate is 7.64%, and for Fortescue the annual dividend rate is 0.80% - You also note that ANZ has suffered from a large one-off event in the recent past (compliance breaches) and, thus, in your return expectations you will adjust the historical return upwards by 5.5% p.a. Fortescue, on the other hand, has had relative good luck recently and, thus, in your return expectations you will adjust the historical return downwards by 5.5% p.a. You are to assess a 2-asset portfolio that consists of ANZ shares (ANZ) and Fortescue (FMG) shares. You have been given the historical prices of these companies over the past 2 years (this .) in order to analyse historical performance. Assume that the risk-free rate is 3.2% per year and the forward-looking market return is expected to be 8.2% per year. Forecast adjustments: - You note that the data you have used does not include dividend information, which you also want to include in your analysis. For ANZ, the annual dividend rate is 7.64%, and for Fortescue the annual dividend rate is 0.80% - You also note that ANZ has suffered from a large one-off event in the recent past (compliance breaches) and, thus, in your return expectations you will adjust the historical return upwards by 5.5% p.a. Fortescue, on the other hand, has had relative good luck recently and, thus, in your return expectations you will adjust the historical return downwards by 5.5% p.a