Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Below is the monthly share price data for Westpac Banking Corporation (ASX code WBC.AX) for 2021. Month Open $ Close $ Jan 19.37 21.13 Feb

  1. Below is the monthly share price data for Westpac Banking Corporation (ASX code WBC.AX) for 2021.

Month

Open $

Close $

Jan

19.37

21.13

Feb

20.80

23.82

Mar

23.87

24.41

Apr

24.42

24.98

May

25.71

26.42

June

26.29

25.81

July

25.94

24.52

Aug

24.65

25.82

Sep

25.63

26.00

Oct

25.61

25.67

Nov

24.50

20.52

Dec

20.50

21.35

Westpac paid a dividend of $0.58 per share on 13 May 2021 and a dividend of $0.60 per share on 5 November 2021.

  1. Calculate the monthly percentage returns for WBC for 2021including the dividends paid.
  2. Calculate the average monthly return (%) for WBC.
  3. Calculate the risk measured by the standard deviation for WBC.
  4. If the correlation between WBC shares and ANZ Bank shares is 0.9989, what level of diversification will you be able to achieve if you create a portfolio consisting of only these two shares? Explain with equations and graph.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Theory And Practice

Authors: Prasanna Chandra

9th Edition

9339222571, 978-9339222574

More Books

Students also viewed these Finance questions