Assessment 2: Report (15%)

(This assessment must be submitted (print copy-A4 size) between 2 May to 6 May 2016 to your tutor during tutorial time.)

Q1. Collect the data from Yahoo Finance and answer the following questions (using the instructions given below):

• 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 separately in a table. (2 marks)
• 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)
• Calculate the mean, standard deviation, variance, coefficient of variation and correlation coefficient for and separately (for two sub-period) and comment on the result. (1+ marks, 1 for calculation 2 for the comment)
• Estimate beta for your selected company for the two sub-periods. (2 marks)
• Explain the value of beta that you have calculated. (2 marks).
• Why the estimated value of beta is different for two sub-periods. (4 marks)

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

Instructions for assessment 2:

Data collection from Yahoo Finance:

• Go to the Yahoo Finance Web page:
• On the left 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.
• Click Historical Prices icon.
• Next, Click Monthly data icon.
• Set Data Range: Start date: February, 2013 and end date: January, 2016.
• Click, Get Prices
• In the bottom of the page click, Download to Spreadsheet. Therefore, download the data and save.
• 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)
• Follow the same steps from 1. And collect the data for the same period for All Ordinaries. This will be your market index.
• Follow the lecture note and divide the data for two sub-periods: a) Feb, 2013 to July, 2014 and b) Aug, 2014 to January, 2016.
• Risk free rate of interest is given in the assignment.
• Students are allowed to use Microsoft excel or calculator for this assessment.