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Calculate the return of share prices and market return

Assignment Help Corporate Finance
Reference no: EM131446458

Assessment: Report

Q1. Collect the data from "Yahoo Finance" and answer the following questions (using the instructions given below):

• Collect the market price index (All Ordinaries), Share price for a company (as per instructions given in page 2) and display the data for two sub-periods separately in a table.

• Calculate the return of share prices and market return (from market price index). Display the calculated returns along with the risk free rate of return (given in a separate excel file) in a table for two sub periods. Calculate and tabulate, and.

• Calculate the mean, standard deviation, variance, coefficient of variation and correlation coefficient for and separately (for two sub-period) and comment on the result. (1+ marks, 1 for calculation 2 for the comment)

• Estimate beta for your selected company for the two sub-periods.

• Explain the value of beta that you have calculated.

• Why the estimated value of beta is different for two sub-periods.

(Note: The assessment should be typed, printed and submitted)

Instructions for assessment:

Data collection from Yahoo Finance:

• Go to the Yahoo Finance Web page:

• On the left hand side enter Symbol or type the name of the Company and click "Look up". For example: Medibank Private. The symbol will come up, otherwise see the list (excel file) of companies and you will find the symbol.

• Click "Historical Prices" icon.

• Next, Click "Monthly data" icon.

• Set Data Range: Start date: February, 2013 and end date: January, 2016.

• Click, "Get Prices"

• In the bottom of the page click, "Download to Spreadsheet". Therefore, download the data and save.

• Keep only "Date" and the "Adj Close". This will be the share price for your selected firm. (Please ignore the dividend paid. That is, delete dividend for each period)

• Follow the same steps from 1. And collect the data for the same period for "All Ordinaries". This will be your market index.

• Follow the lecture note and divide the data for two sub-periods: a) Feb, 2013 to July, 2014 and b) Aug, 2014 to January, 2016.

• Risk free rate of interest is given in the assignment.

• Students are allowed to use Microsoft excel or calculator for this assessment.

Reference no: EM131446458

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