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
assessment and Task 1 of the next assessment (Case Study 2).
Table 1: Monthly Data for Case Companies
Month Boral (BLD) CSL (CSL)
Cochlear
(COH) JB HiFi (JBH)
Bega Cheese
(BGA)
Monthly
returns
Monthly
returns
Monthly
returns
Monthly
returns
Monthly
returns
Oct-18
Nov-18 -9.09% -5.64% -4.67% 0.74% -0.67%
Dec-18 -3.14% 4.37% 2.53% -4.45% -16.86%
Jan-19 0.20% 5.16% 11.44% 1.04% 2.84%
Feb-19 0.61% -0.49% -11.85% 1.07% -6.11%
Mar-19 -5.22% 1.23% 2.54% 14.98% -2.84%
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
Month
Reference
Company
All Ords Total
Returns
Monthly
returns
Month Closing
Index
Oct-18 59483.09
Nov-18 14.00% 58149.20
Dec-18 8.00% 57887.91
Jan-19 1.00% 60199.50
Feb-19 -2.00% 63843.82
Mar-19 3.00% 64292.24
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 SP3 2019
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;
iii) the market index; and
iv) an equally weighted portfolio of your case company and the reference company.
(7.5 marks)
b) Calculate the expected returns and portfolio beta as follows:
(1) Use CAPM to estimate the expected return for the shares of: 1) your case company; and 2)
the reference company as at 17 May 2019. To do this, use the yield to maturity on that date of a
10-year Australian Government bond as a proxy for the risk-free rate, assume the market risk
premium is 6.5% and use your chosen case company’s current beta (see the unit learning
resources and web links for example data sources). Assume that the reference company has a
negative beta of -0.30.
(2) Using the data from part b(1), calculate the portfolio expected return and beta, again
assuming equal weights for your case company and the reference company.
(5.5 marks)
c) Drawing on expectations from theory and incorporating the overall context of your chosen
company, discuss the risk and return measures you have calculated. (12 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 SP3 2019
3
Marking criteria for calculations TOTAL: 13 marks
MARKING CRITERIA Excellent Very Good Good Satisfactory Poor
Accurate calculation of historical
returns and standard deviation for
two companies, index and
portfolio (7.5 marks)
Correct input data used.
Technique and all final
calculated figures are
correct (7.5 marks)
Mostly correct input data.
Correct techniques and
calculations. (6 marks)
Correct input data. Mostly
correct techniques and
calculations. (5 marks).
Mostly correct input data.
Mostly correct techniques
and calculations. (4 marks).
Mostly incorrect data and
techniques. (0 to 3 marks)
Accurate calculation of expected
returns for two companies and
portfolio and accurate calculation
of portfolio beta (5.5 marks)
Correct input data used.
Technique and all final
calculated figures are
correct (5.5 marks)
Mostly correct input data.
Correct techniques and
calculations. (4.5 marks)
Correct input data. Mostly
correct techniques and
calculations. (3.5 marks).
Mostly correct input data.
Mostly correct techniques
and calculations. (3 marks).
Mostly incorrect data and
techniques. (0 to 2 marks)
Marking criteria for discussion & structural component TOTAL: 17 marks
MARKING
CRITERIA Excellent Very Good Good Satisfactory Poor
Insightful and
relevant
discussion of risk
and return
demonstrated in
the quantitative
analysis (12
marks)
Accurately and comprehensively
interprets all calculated risk and
return measures. Correctly
compares appropriate measures
and explains differences, drawing
on relevant theory. Accurately
weaves relevant context (e.g.
company industry, market
conditions) into explanations.
Uses tables or graphs effectively
to enhance the discussion. Uses
and explains relevant technical
terms. (12 marks)
Accurately interprets nearly all
calculated risk and return
measures. Correctly compares
appropriate measures and
explains differences, drawing
on relevant theory. Weaves
relevant context into
explanations. Uses tables or
graphs effectively to enhance
the discussion. Uses and
explains most relevant technical
terms. (10 marks)
Accurately interprets most
calculated risk and return
measures. Correctly compares
appropriate measures and
explains some differences,
drawing on relevant theory.
Incorporates some relevant
context. Uses tables or graphs
but may not be effective or
explained. Uses and explains
some technical terms. (8
marks)
Accurately interprets most
calculated risk and return
measures. Correctly
compares some appropriate
measures and explains some
differences. Tables or
graphs, if used, may not be
effective or explained. Uses
and explains some technical
terms. Context and theory
are limited or incorrect (6
marks)
While an explanation of
technical terms may have
been attempted, there is
little or no accurate
interpretation or comparison
of risk and return measures.
Context, theory and
explanations are limited,
incorrect or absent. (0 to 5
marks)
Presentation and
written
expression
(5 marks)
Overall presentation is well
organised and looks professional.
All data sources and other
references are provided where
needed in appropriate format
and detail. Use of language
makes meaning consistently
clear. There are no or very few
grammar, syntax and spelling
errors. (5 marks)
Overall presentation is mostly
well-organised and
professional. All necessary data
sources and other references
are provided, mostly in
appropriate positions, format
and detail. Use of language
makes meaning consistently
clear. There are very few
grammar, syntax and spelling
errors. (4 marks)
Overall presentation is mostly
well-organised and neat. All
necessary data sources and
other references are
provided, mostly in
appropriate positions, format
and detail. Use of language
mostly makes meaning clear.
There may be several
grammar, syntax and spelling
errors. (3.5 marks)
Overall presentation is fairly
neat and organised. Not all
necessary data sources are
provided or most are not in
appropriate positions,
format and detail. Use of
language mostly makes
meaning clear. There are
several grammar, syntax
and spelling errors. (2.5
marks)
Overall presentation is
generally unprofessional. Not
all necessary data sources
are provided or most are not
in appropriate positions,
format and detail. Use of
language often makes
meaning unclear. There may
be many grammar, syntax
and spelling errors. (0 to 2
marks)