Posted: May 6th, 2015

Market Research and Analysis in Shares Purchasing

Paper, Order, or Assignment Requirements

This assessment is in report format.
There are many calculation required. One of those, which is monthly holding period return and graphing the results, is already done and included in an attached Excel file.
Specific question, instruction and marking rubric are also attached.
Please let me know if you have any question.

You are an investment advisor. Based on your own market research on AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED and BHP BILLITON LIMITED, you are required to recommend to your customer which of the companies’ ordinary shares is better value for money? In your recommendation, include all the calculations and market information on which your recommendation is based. You may also include the assumptions which you made about your customer’s financial situation when recommending purchase of the below company’s shares i.e. short and long term goals etc.
Calculate the following to help you come up with a recommendation as a minimum:

• Find the monthly holding period returns (%) for the period 1 October 2013 – 30 September 2014 for AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED and BHP BILLITON  LIMITED as proxied by the All Ordinaries index. Graph your results on one graph with returns on the y axis and time on the x axis. (Use ‘Close’ rather than ‘Adjusted Close’ for the selling price and ignore any dividends.)
• Calculate the required rate of return on ordinary shares of the above two companies. (Use Capital Asset Pricing Model)
• Calculate ordinary share valuation – single holding period for both the above companies.

Notes: make sure all the calculations are shown clearly.