Calculate and graph the average annual returns , Financial Accounting

Assignment Help:

This is an individual assessment contributing 50% of your marks for the module. The assignment is intended to help you develop skills of implementing financial models in Excel. The assignment provides you with the opportunity to produce spreadsheet applications that solve and analyse corporate finance problems.

You are required to set up a separate worksheet (spreadsheet model) for each of the following two problems:
1) Calculate the yield to maturity of a 7-year $1,000 par value bond with an annual coupon rate of 7.5% and a current price of $1,125. Provide the spreadsheet solutions for both annual and semi-annual payments of interest. Comment on the relationship between the yield to maturity and the timing of interest payments, providing an appropriate table or graph.

2) Obtain from Bloomberg (or Datastream, or Thomson ONE Banker, or Yahoo!Finance) the beginning of month values for the period 2009-2012 of the Standard & Poor's (S&P) SMALL CAP 600 Index and New York Stock Exchange (NYSE) World Leaders Index. Assume that you are a risk-averse investor.

For each of the two assets represented by the indices, calculate annual returns and build a frequency distribution of annual returns. Provide graphs of the distributions.

Explore the risk-return relationship for the two assets. Plot your results on a graph with the standard deviation of annual returns of each asset on the horizontal axis and the average annual return on the vertical axis, and comment on which asset performed better.
Assume that you form a portfolio by investing equal amount of money in each asset. Determine the average and standard deviation of the portfolio's annual returns. Provide your interpretation of the risk and return of the equally-weighted portfolio compared to those of the individual assets.

Calculate and graph the average annual returns and standard deviations of all portfolios that are combinations of the S&P SMALL CAP 600 Index and NYSE World Leaders Index with the proportion of the S&P SMALL CAP 600 Index being 0, 10, 20, 30, 40, 50, 60, 70, 80, 90, 100%. Comment on the profile of the risk-return trade-off between the portfolios.

 


Related Discussions:- Calculate and graph the average annual returns

Corporation''s gain or loss on the sale, The Gladys Corporation buys office...

The Gladys Corporation buys office equipment costing $426,000 on May 12, 2013. In 2015, new and improved models of the equipment make it obsolete, and Gladys sells the old equipmen

Conversion of members'' to creditors'' winding up-liquidation, Conversion o...

Conversion of members' to creditors' winding up If the liquidator in a members' winding up forms the opinion that the company will not be able to pay its debts in full within t

Calculate the earnings per share, Q. Calculate the earnings per share? ...

Q. Calculate the earnings per share? Dividend cover is a measure of the relationship among dividends and earnings and may be calculated for the whole company or on a per share

Concept of accounting, what is the implication of applying accounting conce...

what is the implication of applying accounting concepts wrongly

Deferred tax assets and deferred tax liability, Below are excerpts from Saf...

Below are excerpts from Safeway's 2010 Annual Report, including its Consolidated Balance Sheets, a portion of Note E, Lease Obligations, and Note H, Taxes on Income, from the Notes

What is accounting, What is accounting? Accounting is concerned with an...

What is accounting? Accounting is concerned with analysing, collecting as well as communicating financial information. Purpose is to help people who use this info to make more

Earnings per share, Rockland Corporation earned net income of $346,500 in 2...

Rockland Corporation earned net income of $346,500 in 2012 and had 100,000 shares of common stock outstanding throughout the year. Also outstanding all year was $924,000 of 10% bon

Example of sinking fund factor, How much must you save annually in order to...

How much must you save annually in order to accumulate Rs. 20, 00,000 by the ending of 10 years, whether the saving earns an interest of 12%?             Solution : A = [k/(

What is deferred taxation, Deferred taxation is caused by timing differenc...

Deferred taxation is caused by timing differences that arise when a transaction is recognized differently for accounting and tax purposes; for i.e, capital expenditure, that invol

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd