Use the weekly historical prices of four companies, Santos (STO), Rio Tinto (RIO), Qantas (QAN) and Crown Resorts (CWN), and of the All-Ordinaries index from the unit site for the Jan 2018 -Dec 2019 and April 2020-Jun2021 periods, and ignore dividend payments in these periods to answer the following questions: PlEASE ONLY ANSWER QUESTION E AND F

a. Using the All-Ordinaries index as a proxy for the Australian stock market, comment on the performance of the Australian stock market in two periods: Jan 2018 to Dec 2019 and Jan 2020 to July 2021? From your own research, what Australian industries are mostly affected by the pandemic in the 2020-2021 period. (3 marks)

b. Based on your market research of the above companies' performance, provide a recommendation statement which includes a) which two assets should be chosen to form an investment portfolio for the period Aug 2021-Aug 2023, assuming equal weighting for all assets in the portfolio, and give reasons for your choice.; b) as a group, how you came to agree on the two assets you have recommended and c) Highlight any opposing viewpoints that were raised by team members before a conclusion was reached. (7 marks)

c. Assign each member of your group one or two combinations of assets and calculate the portfolio expected return and risk for the combinations assigned for each period, assuming equal weighting for all assets in the portfolio. Which combination gives the highest expected return of the portfolio? Which combination gives the lowest risk? And which combination gives the highest risk-adjusted return? You can use the ratio between return and standard deviation as a proxy for risk-adjusted return. (12 marks)

Note that you should keep each group member's working and include them in the Appendix of your submitted main file.

d. Based on the outcomes in part c. for both periods and your own personal judgement, which two assets should be chosen to form an investment portfolio with the highest risk-adjustment return for the future investment period Aug 2021-Aug 2023. Compare your choice with your answer is part b. (3 marks)

e. As equal weighting scheme may not give the optimal portfolio, calculate the optimal weight of the two assets recommended in part d. that would further minimise the risk of the portfolio in both periods, the Jan 2018 -Dec 2019 and April 2020-Jun 2021. What is the expected return and risk of the portfolio based on this optimal weight? (5 marks)

f. Crown Resorts has been found not suitable to hold casino licences in some states in Australia in the recent royal commission report. Briefly highlight the misconducts detailed in the royal commission report that leads to a serious agency problem between the management and shareholders of the company. What type of risk the company is facing because of the Royal Commission findings? What possible actions should shareholders take to alleviate this problem in the future? (5 marks)

I shared stock data with you on Google Drive, pls check it !!!

https://docs.google.com/spreadsheets/d/18iiYWMfTGljaEidR0rnD4KLY3cAAUE4B/edit?usp=sharing&ouid=101420162061700538888&rtpof=true&sd=true