FINM7008 Applied Investments
Semester 2, 2022
Assignment
Weighting: 15% of assessment
Due date: By 5pm, Thursday 20 Oct (Week 11) (Submit electronically via Wattle)
The attached spreadsheet provides return index of selected sectors and the whole Australian
market, over the last 5 years. Select a sector and prepare a report describing the historical
performance of your selected sector within the time period. In your report, you should
• Provide a brief written discussion of your sector over the 5-year period, i.e., were
there events that were favourable or unfavourable to the performance of the sector?
How did it perform relative to the Australia market overall? You can consult the
financial press and cite relevant sources.
• You should provide some statistics on the distribution of the returns of your selected
sector over the 5-year period, using monthly data. Ensure that you report annualised
figures over the entire 5-year period, and report results for each calendar year in your
sample. Discuss and interpret your findings.
• Next, provide an analysis of the sector’s performance relative to that of the Australian
Market overall. Use appropriate performance valuation matrix. Use a single factor
model if you want to use factor model.
• Select FIVE companies of your choice from within your sector and calculate the
weightings which would result in the optimal risky portfolio, and the minimum
variance portfolio. Use CAPM model to calculate your variance-covariance matrix.
Additionally, provide a plot of the portfolio frontier, and identify the locations of
these portfolios. You can achieve this using excel or other programming software.
You can source your data from one of the below sources:
i. The Australian Stock Exchange
http://www.asx.com.au/asx/markets/equityPrices.do.
ii. Yahoo! Finance.
Additional points
• • Please submit only TWO files via Wattle: A Word/PDF document containing the
written report, and an Excel file containing any calculations undertaken within the
assignment; make sure the report file contains your name and uID.
• • Make sure your written report is self-contained and sufficiently complete so that
someone can easily understand your findings and interpretation/discussion without
looking any further. Do not simply state “see Excel spreadsheet for the results”; make
sure you include discussion throughout the report in reference to your findings. There
is no need to show detailed workings within the report itself, but concise explanation
of your methods, and usage of tables and diagrams are expected. Although the
spreadsheet is required as part of the submission, it will only be used to check the
accuracy of calculations, if necessary, and will not be considered as substantive as the
report when marking.
• Please include a reference list containing any cited articles and use subheadings where
appropriate. You may include appendices if you feel they add to your assignment. But
be aware that they will not be considered as important as the content of the report,
during marking.
• Use a 12pt font size, and 1.5 or double line spacing throughout your document.
• Your report has a maximum page of 5 pages excluding cover page, reference list and
any appendices.