You believe that the past years are a good indicator of the future performance of the assets and the assets risks can be assessed on a standalone basis using standard deviation and coefficient of variation and as a part of Office Pro?s existing portfolio of assets using the Capital Asset Pricing Model (CAPM).

C. Your Manager, has asked you to prepare a report which will assist in making a decision for Office Pro. The following are some of the highlights of your report, assuming the market has a risk-free rate of 8 percent and the return on the market is 15 percent:

1. The Rate of Return for each Asset per year for 2007 to 2016.

2. Each asset?s average rate of return based on the historical annual data provided.

3. Asset S and Asset T?s standard deviation and coefficient of variation.

4. Comment on the risk and return for each asset based on your answers to 2 and 3 above.

5. The required return for each asset.

6. A recommendation on investing in which the two assets, giving reasons for your recommendation.

7. Comment on the use of standard deviation as oppose to the use of CAPM as a risk measurement.

UNIVERSITY OF THE WEST INDIES OPEN CAMPUS MGMT 2023 - FINANCIAL MANAGEMENT I GROUP ASSIGNMENT- due March 19, 2017, 11:55 PM ECT This is a collaborative group project. Students are expected to work in groups of 4 or 5, and collaborate through the use of various social media at their disposal, to discuss the questions and prepare the group's submission. The assignment will consist of both theoretical and computational questions based on Units 5 and 6. A group leader should be selected and one assignment will be submitted on behalf of the group along with a table showing the level of participation by each group member. The assignment is to be uploaded to the drop box online and will be graded by your tutor. The table should look like this: Member's Full name Member 1 Member 2 Member 3 Member 4 Member 5 Collaboration and Participation 7/8 7/8 8/8 1/8 0/8 Peer Review Section: The assignment will includes a peer review section. The Criteria \"Collaboration with group\" will be completed by your peers and will be out of 8 points. Each group member will assign a mark out of 8 to their peers and the average of which will be submitted by the group leader. For example: if 4 members graded member \"1\" as, 6, 7, 7, 8 then A's final mark will be (6+7+7+8)/4 = 7. This mark is submitted by the group leader along with the assignment. Group Assignment Rubric Assignment will be graded out of 48 points based on the rubric below, with conversions of total score/48 x 10 for award of marks as follows: POINTS 4 points 3 points 2 points 1 points 0 Criteria Excellent Very Good Satisfactory Poor Non Response Timeliness and Referencing Assignment was Submitted within two days of the due date and referenced appropriately Assignment was on time AND referenced in correctly Assignment was ONE DAY LATE but was referenced appropriately Assignment was LATER THAN ONE DAY, and was not referenced No assignment was submitted Understanding and interpretation (Report 1) Response demonstrated an exceptional understanding of what was required for Report 1 Response demonstrated a good understanding of what was required for Report 1 Response demonstrated a fair understanding of what was required for Report 1 Response demonstrated a lack of understanding of what was required for Report 1 Group provided no response Accuracy (Report 1) Calculations for annual rate of return, average return, standard deviation and coefficient of variation were almost 100% accurate Calculations for annual rate of return, average return, standard deviation and coefficient of variation were about 60 to 80% accurate Calculations for annual rate of return, average return, standard deviation and coefficient of variation were about 40 - 50% accurate Calculations for annual rate of return, average return, standard deviation and coefficient of variation were mostly inaccurate Group provided no response Advice provided (Report 1) Advice provided was sound and based on logical interpretation of results Advice provided was reasonable and partially logical based on the results Advice provided was fair and largely based on personal feeling and not results Advice provided was unsound and basis not illogical and inaccurate Group provided no response Understanding and interpretation (Report 2) Response demonstrated an exceptional understanding of what was required for Report 2 Response demonstrated a good understanding of what was required for Report 2 Response demonstrated a fair understanding of what was required for Report 2 Response demonstrated a lack of understanding of what was required for Report 2 Group provided no response Accuracy (Report 2) Calculations for expected return, standard deviation and coefficient of variation were almost 100% accurate Calculations for expected return, standard deviation and coefficient of variation were 60% accurate Calculations for expected return, standard deviation and coefficient of variation were 40% accurate Calculations for expected return, standard deviation and coefficient of variation were mostly inaccurate Group provided no response Advice provided (Report 2) Advice provided was sound and based on logical interpretation of results Advice provided was reasonable and partially logical based on the results Advice provided was fair and largely based on personal feeling and not results Advice provided was unsound and basis not illogical and inaccurate Group provided no response Understanding and interpretation (Report 3) Response demonstrated an exceptional understanding of what was required for Report 3 Response demonstrated a good understanding of what was required for Report 3 Response demonstrated a fair understanding of what was required for Report 3 Response demonstrated a lack of understanding of what was required for Report 3 Group provided no response Accuracy (Report 3) Calculations for average rate of return, rate of return, standard deviation coefficient of variation were almost 100% accurate Calculations for average rate of return, rate of return, standard deviation coefficient of variation were about 60 - 80% accurate Calculations for average rate of return, rate of return, standard deviation coefficient of variation were about 40-50% accurate Calculations for average rate of return, rate of return, standard deviation coefficient of variation were mostly inaccurate Group provided no response Advice provided (Report 3) Collaboration with group members. Peer assessment done individually Advice provided was sound and based on logical interpretation of results Advice provided was reasonable and partially logical based on the results Advice provided was fair and largely based on personal feeling and not results Advice provided was unsound and basis illlogical and inaccurate 8 points 6 points 4 points 2 points Group member participated fully in the project and shared the workload fairly; Demonstrated leadership to facilitate and achieve the project goals and meet deadline. Group member participated in the project and shared the workload; worked towards achieving the project goals and meeting the deadline. Group member participated in the project but emphasis was in completing own work; may have not shared workload fairly towards achieving the project goals and meeting the deadline Group member rarely participated or contributed to the project towards achieving the project goals and meeting the deadline; did not share workload fairly. Group provided no response 0 Student didn't collaborate with group As a finance major student of the UWI OC, you have just landed a lucrative job as a Financial Planner with First Citizens Investment Services (FCIS), a major financial services company in your home country. Your first assignment is to help one of its major clients Solar Inc., invest in a high end stock. Solar Inc.'s CEO is impressed with Samsung's performance over the years and have asked you to explore the possibility of including a Samsung stock in its current stock portfolio. You have come up with the following historical information for Samsung. 2011 2012 2013 2014 2015 Dividend Beginning paid per Price Ending Price year $68.20 $72.45 $45.00 72.45 85.50 50.00 85.50 98.74 58.00 98.74 122.60 65.00 122.60 136.85 70.00 A. Based on the above information, you are to examine the annual rate of return, the average return for the five year period (assuming that the probability of returns are equal for each year), the standard deviation of returns for the past five years and the coefficient of variations of returns. Based on your calculations, what advice can you give to Solar Inc. if the CEO has indicated that the company will only want to invest in a stock with a coefficient of variation of returns below 0.75. Your employer was very impressed with your performance so far, and has granted you the privilege of helping Mr. TJ Welsh, a long standing client of the company, who is indecisive about which combination of assets to add to his portfolio. FCIS have been observing the performance of three assets for some time now, and have forecasted the following expected returns for the following three assets and asked you to make a determination on the best option for Mr. Welch. Year 2017 2018 2019 2020 Expected Return Asset A Asset B Asset C 16.00 17.00 14.00 17.00 16.00 15.00 18.00 15.00 16.00 19.00 14.00 17.00 You have explored three options for Mr. Welsh which include: (a) full 100 percent investment in Asset A, (b) 50 percent in asset A and 50 percent in asset B, (c) a 50 percent in asset A and 50 percent in asset C. B. Given the above investment options, and the forecasted information, you were asked to determine the expected returns, standard deviation of returns and coefficient of variation of returns for each of the three options and provide your Manager with a recommendation for investment for Mr. Welsh. You must also provide the workings as part of your report and comment on the correlation for options AB and AC. You next client, is Office Pro, a producer of office furniture and you were asked to evaluate the risk and return of two assets (Asset S and Asset T) which it is considering for its asset portfolio. You checked online for the company's financial statements and found the following historical data for the two assets for the past ten years. Asset S (Beta 0.9) Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Dividends Opening paid ($) Value ($) 1000 20000 1500 22000 1400 21000 1700 24000 1900 22000 1600 23000 1700 26000 2000 25000 2100 24000 2200 27000 Asset T (Beta = 1.5) Closing Value Dividends Opening Closing ($) paid ($) Value ($) Value ($) 22000 1500 20000 20000 21000 1600 20000 20000 24000 1700 20000 21000 22000 1800 21000 21000 23000 1900 21000 22000 26000 2000 22000 23000 25000 2100 23000 23000 24000 2200 23000 24000 27000 2300 24000 25000 30000 2400 25000 25000 You believe that the past years are a good indicator of the future performance of the assets and the assets risks can be assessed on a standalone basis using standard deviation and coefficient of variation and as a part of Office Pro's existing portfolio of assets using the Capital Asset Pricing Model (CAPM). C. Your Manager, has asked you to prepare a report which will assist in making a decision for Office Pro. The following are some of the highlights of your report, assuming the market has a risk-free rate of 8 percent and the return on the market is 15 percent: 1. The Rate of Return for each Asset per year for 2007 to 2016. 2. Each asset's average rate of return based on the historical annual data provided. 3. Asset S and Asset T's standard deviation and coefficient of variation. 4. Comment on the risk and return for each asset based on your answers to 2 and 3 above. 5. The required return for each asset. 6. A recommendation on investing in which the two assets, giving reasons for your recommendation. 7. Comment on the use of standard deviation as oppose to the use of CAPM as a risk measurement. Present your assignment as a three part report, providing the necessary details and recommendations to your Manger for each of the above mentioned clients. Kindly state all assumptions made in your recommendations/workings. Let's see if you will be entitled for a pay raise