Reference no: EM133204689

Part a. of this question, calculation of tax effects and incremental cash flows, can be set up using excel. However, after you construct your table in Excel please simply copy and paste into a Word document. Remember you must solve each problem using the appropriate formula/e and you must show all calculations, so you have to show how the NPV, etc. was derived. This does not mean giving the Excel algorithm nor the cell references, as they do not show how the solution was derived. So, for example show how you have discounted the cash flows 

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

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 2021(including 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.