Reference no: EM133233662

1. For BHP Billiton, conduct some market research to find out what has been happening to your stock for the last 5 years. Based on what we learnt, there must be two primary sources which cause the prices of your stock to plunge (i.e. decline) at certain times; Unsystematic risk and Systematic risk. Highlight two specific down periods where one is caused by unsystematic risk and the other by systematic risk.

• For each, discuss the real-event in detail and how it affected the company performance on the day (or over the days) by referring to price changes (You can have a look at daily price changes in Yahoo by following 1.e. in Part I and changing the option to 'Daily'). Clearly discuss through what channels company performance would have been affected.
• For each, discuss how S&P/ASX200 responded on the same day (or over the days) by referring to value changes.
• Discuss your findings with reference to the impact of unsystematic and systematic risks.

2. Compare and interpret the betas of BHP and TPG.

BHP Beta: 0.010549

TPG Beta: -0.000051

3. Evaluate the following statement. "A stock with higher standard deviation will lead to higher returns"

4. Considering BHP Group and TPG Telecom:

a. Which stock is riskier when each stock is held in isolation and why?

b. Which stock is riskier as a part of a well-diversified portfolio and why?