FINM7008 Applied Investments
Semester 2, 2022
Assignment
Weighting: 15% of assessment
Due date: By 5pm, Thursday 20 Oct (Week 11) (Submit electronically via Wattle)
The attached spreadsheet provides return index of selected sectors and the whole Australian market, over the last 5 years. Select a sector and prepare a report describing the historical performance of your selected sector within the time period. In your report, you should
• Provide a brief written discussion of your sector over the 5-year period, i.e., were there events that were favourable or unfavourable to the performance of the sector? How did it perform. relative to the Australia market overall? You can consult the financial press and cite relevant sources.
• You should provide some statistics on the distribution of the returns of your selected sector over the 5-year period, using monthly data. Ensure that you report annualised figures over the entire 5-year period, and report results for each calendar year in your sample. Discuss and interpret your findings.
• Next, provide an analysis of the sector’s performance relative to that of the Australian Market overall. Use appropriate performance valuation matrix. Use a single factor model if you want to use factor model.
• Select FIVE companies of your choice from within your sector and calculate the weightings which would result in the optimal risky portfolio, and the minimum variance portfolio. Use CAPM model to calculate your variance-covariance matrix. Additionally, provide a plot of the portfolio frontier, and identify the locations of these portfolios. You can achieve this using excel or other programming software.
You can source your data from one of the below sources:
i. The Australian Stock Exchange
http://www.asx.com.au/asx/markets/equityPrices.do.
ii. Yahoo! Finance.
Additional points
• • Please submit only TWO files via Wattle: A Word/PDF document containing the written report, and an Excel file containing any calculations undertaken within the assignment; make sure the report file contains your name and uID.
• • Make sure your written report is self-contained and sufficiently complete so that someone can easily understand your findings and interpretation/discussion without looking any further. Do not simply state “see Excel spreadsheet for the results”; make sure you include discussion throughout the report in reference to your findings. There is no need to show detailed workings within the report itself, but concise explanation of your methods, and usage of tables and diagrams are expected. Although the spreadsheet is required as part of the submission, it will only be used to check the accuracy of calculations, if necessary, and will not be considered as substantive as the report when marking.
• Please include a reference list containing any cited articles and use subheadings where appropriate. You may include appendices if you feel they add to your assignment. But be aware that they will not be considered as important as the content of the report, during marking.
• Use a 12pt font size, and 1.5 or double line spacing throughout your document.
• Your report has a maximum page of 5 pages excluding cover page, reference list and any appendices.