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ACC91210 Finance for Managers

26 Mar

1
ACC91210 Finance for Managers (Online) Study Period 2, 2018
Assessment 3: Case Study 1
Due date: 2 April 2018, 11PM
This assignment has a 30% weighting in your overall mark for this unit and focuses on content from
Week 3. It will be marked out of 30. Marks will be allocated as indicated in the rubric below. Your total
assignment submission should not exceed 1,500 words, excluding cover sheet and reference list.
Overall, the assignment requires you to conduct a risk and return analysis using historical market data.
Prepare your data prior to performing the risk and return calculations:

Choose one company from Table 1 below. This company will be your case company for this and
Task 1 of the next assessment (Case Study 2).

Table 1: Monthly Data for Case Companies

Boral (BLD) CSL (CSL) Cochlear
(COH)
JB HiFi (JBH) MYOB
(MYO)
Bega
Cheese
(BGA)
Monthly
returns
Monthly
returns
Monthly
returns
Monthly
returns
Monthly
returns
Monthly
returns
Sep-17
Oct-17 5.613% 3.710% 10.496% -0.087% 25.727% 7.613%
Nov-17 5.175% 3.174% 2.729% 3.100% -6.933% 4.898%
Dec-17 3.590% -1.423% -5.251% 5.633% 3.725% -6.226%
Jan-18 2.696% 3.623% 1.454% 17.201% -5.801% -2.490%
Feb-18 -0.813% 11.440% 5.860% -8.279% -7.331% -2.695%

Source: Returns calculated from historical share prices and dividends from Morningstar DatAnalysis Premium.
For completion of the assessment tasks, you will also need the following data (see Table 2 below):
Table 2: Monthly Data for Reference Company and Market Index

Reference
Company
All Ords
Accumulated
Monthly
returns
Month Closing
Index
Sep-17 55459.750
Oct-17 -8.000% 57712.860
Nov-17 -2.000% 58813.500
Dec-17 7.000% 60007.770
Jan-18 -2.000% 59809.190
Feb-18 6.000% 59916.010

Source: Hypothetical reference company data. All Ordinaries Accumulated Index data from S&P
https://au.spindices.com/indices/equity/all-ordinaries.
Note: You will NOT submit a spreadsheet, but a written analysis (as Word file) for this assessment.
Assessment 3: Case Study I ACC91210 SP2 2018
2
Tasks for Case Study 1
a) Using the data above, calculate:
(1) the historical monthly rates of return for the market index only (monthly rates of return for
the companies are given); and
(2) the historical average rate of return and standard deviation of returns for:
i) your case company;
ii) the reference company; and
iii) the market index. (5 marks)
b) Calculate portfolio historical average rate of return and standard deviation assuming a portfolio
of equal weighting for your case company and the reference company (2.5 marks).
c) Use CAPM to estimate the expected return for the shares of: 1) your case company; and 2) the
reference company as at 28 February 2018. To do this, use the yield to maturity on that date of a
10-year Australian Treasury bond as a proxy for the risk-free rate, assume the market risk
premium is 6.6% and use the company’s current beta. Assume that the reference company has a
negative beta of -0.20. (5 marks)
d) Using the data from part c, calculate the portfolio expected return and beta, again assuming
equal weights for the two companies. (2.5 marks)
e) Drawing on expectations from theory and incorporating the overall context of your chosen
company, discuss the risk and return measures you have calculated. (10 marks)
Note: The remaining five (5) marks are allocated to presentation and written expression of the
analysis (see the rubric below).

Assessment 3: Case Study I ACC91210 SP2 2018
3

Marking criteria for calculations TOTAL: 15 marks
MARKING CRITERIA Excellent Very Good Good Poor Very poor
Accurate calculation
of historical returns
and standard
deviation for two
companies and index
(5 marks)
You have used the correct
data and techniques for
calculating historical rate
of return and standard
deviation and final figures
presented are correct (5
marks)
You have used the correct
data and techniques for
calculating historical rate
of return and standard
deviation but some final
figures presented are
incorrect (4 to 4.5 marks)
You have used the correct
data and mostly correct
techniques for calculating
historical rate of return and
standard deviation but
some or all of the final
figures presented are
incorrect (2.5 to 3.5 marks)
You have not used correct
data or correct
techniques for calculating
historical rate of return
and standard deviation (1
to 2 marks)
There is little to no
attempt to calculate
historical rate of return
and standard deviation.
Data and techniques are
incorrect (0 to 0.5 marks)
Accurate calculation
of portfolio historical
average rate of return
and standard
deviation (2.5 marks)
You have used the
appropriate input data
and correct technique for
calculating portfolio
historical rate of return
and standard deviation
and final figures presented
are correct (2.5 marks)
You have used the
appropriate input data
and correct technique for
calculating portfolio
historical rate of return
and standard deviation
but some final figures
presented are incorrect (2
marks)
You have used the
appropriate input data and
mostly correct technique
for calculating portfolio
historical rate of return and
standard deviation but
some or all final figures
presented are incorrect
(1.5 marks)
You have not used
appropriate input data or
the correct technique for
calculating portfolio
historical rate of return
and standard deviation.
(1 mark)
There is little to no
attempt to calculate
portfolio historical rate of
return and standard
deviation. Data and
techniques are incorrect (0
to 0.5 marks)
Accurate calculation
of expected returns
for two companies (5
marks)
You have sourced and
used all the correct input
data to calculate expected
return. You have used the
correct technique to
calculate expected return
and presented correct
final expected return
figures (5 marks).
You have sourced and
used all the correct input
data to calculate expected
return. You have used the
correct technique to
calculate expected return
but presented some
incorrect final expected
return figures (4 to 4.5
marks).
You have sourced and used
mostly correct input data
to calculate expected
return. You have mostly
used the correct technique
to calculate expected
return but some or all final
expected return figures are
incorrect (2.5 to 3.5
marks).
You have not sourced and
used correct input data to
calculate expected return
or you have not used the
correct technique to
calculate expected return
(1 to 2 marks).
There is little or no
attempt to calculate
expected return. Data and
techniques are incorrect (0
to 0.5 marks)
Accurate calculation
of portfolio expected
return and beta (2.5
marks)
You have used the
appropriate input data
and correct technique for
calculating portfolio
expected return and beta
and final figures presented
are correct (2.5 marks)
You have used the
appropriate input data
and correct technique for
calculating portfolio
expected return and beta
but some final figures
presented are incorrect (2
marks)
You have used mostly
appropriate input data and
mostly correct technique
for calculating portfolio
expected return and beta
but some or all final figures
presented are incorrect
(1.5 marks)
You have not used
appropriate input data or
correct technique for
calculating portfolio
expected return and beta
(1 marks)
There is little or no
attempt to calculate
portfolio expected return
and beta. Data and
techniques are incorrect (0
to 0.5 marks)

Assessment 3: Case Study I ACC91210 SP2 2018
4

Marking criteria for written & structural component TOTAL: 15 marks
MARKING CRITERIA Excellent Very Good Good Poor Very poor
Insightful and
relevant discussion of
risk and return
demonstrated in the
quantitative analysis
(10 marks)
You have accurately and
comprehensively
interpreted each
calculated risk and return
measure. You have
compared appropriate
measures and explained
differences, drawing on
relevant theory. You have
accurately woven relevant
context (e.g. company
industry, market
conditions) into your
explanations. You have
used and explained
important technical terms.
(9 to 10 marks)
You have accurately
interpreted nearly all
calculated risk and return
measures. You have
compared appropriate
measures and explained
differences, drawing on
relevant theory. You have
woven relevant context
into your explanations.
You have used and
explained most important
technical terms. (7.5 to 8.5
marks)
You have interpreted most
calculated risk and return
measures. You have
compared appropriate
measures and explained
some differences, drawing
on relevant theory. You
have included some
relevant context in your
discussion. You have used
and explained some
technical terms. (5 to 7
marks)
You have interpreted
some calculated risk and
return measures. You have
compared appropriate
measures and summarised
some differences. You
have used and explained
some technical terms. (2.5
to 4.5 marks)
While an explanation of
technical terms may have
been attempted, there is
little or no interpretation
or comparison of risk and
return measures. (0 to 2
marks)
Presentation and
written expression
(5 marks)
Overall presentation is
well designed and
professional. Data sources
are provided in
appropriate format and
detail, as are other
references as needed. Use
of language makes
meaning consistently
clear. There are no or very
few grammar, syntax and
spelling errors. (5 marks)
Overall presentation is
professional. Data sources
and other references are
provided, mostly in
appropriate format and
detail. Use of language
makes meaning
consistently clear. There
are very few grammar,
syntax and spelling errors.
(4 to 4.5 marks)
Overall presentation is
generally professional.
Data sources are provided
and other references are
provided. Use of language
mostly makes meaning
clear. There may be
several grammar, syntax
and spelling errors. (2.5 to
3.5 marks)
Overall presentation is
generally unprofessional.
Data sources are not
provided in appropriate
format and detail. Use of
language often makes
meaning unclear. There
are several grammar,
syntax and spelling errors.
(1 to 2 marks)
Overall presentation is
unprofessional. Data
sources are not provided.
Use of language mostly
makes meaning unclear.
There are many grammar,
syntax and spelling errors.
(0.5 to 0 marks)

 

 
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Posted by on March 26, 2018 in Academic Writing

 

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