Assessment 3, Finance for Managers SP5 2021
Total 30 marks
Due Date: 27 September 2021, 11PM
In this assignment, you will analyse risk and return data and present your results and discussion in a maximum 5-minute video presentation. The marking criteria and performance level standards are shown in the rubric at the end of this document.
Prepare your data
• Choose one ASX listed company from Table 1 below. This company will be your case company for this assessment and Task 1 of the next assessment (Assessment 4).
Table 1: Monthly Data for Case Companies
Month Adairs (ADH) Beacon
Lighting (BLX) Nick Scali (NCK)
Monthly returns Monthly returns Monthly returns
Feb-21 4.96% 12.35% -1.26%
Mar-21 3.15% -4.87% 1.97%
Apr-21 22.11% 2.54% 12.64%
May-21 3.02% 7.42% -0.62%
Jun-21 -11.09% -2.81% 5.02%
Source: Returns calculated using share price and dividend data from Morningstar DatAnalysis Premium.
• 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 Index
Monthly returns Month Closing Index
Feb-21 10.00% 75713.00
Mar-21 1.00% 77109.00
Apr-21 -5.00% 80129.00
May-21 5.00% 81695.00
Jun-21 15.00% 83786.00
Source: Hypothetical reference company data. All Ordinaries Total Returns (Accumulated) Index data from S&P https://au.spindices.com/indices/equity/all-ordinaries.
• You will also need to collect the following data from the first link in the Web Links section of the unit site:
i) the yield to maturity for 10-year Australian Government bonds on 13 September 2021; and ii) your chosen case company’s 5-year beta in September 2021.
Finance for Managers, Assessment 3 Page 1 of 3
Perform required calculations with the data set
1. (a) The historical monthly rates of return for the market index only (monthly rates of return for the companies are given); and
(b) The historical average monthly rate of return and standard deviation of returns for:
• your case company;
• the reference company;
• the market index; and
• a portfolio consisting of a 60% investment in your case company and a 40% investment in the reference company.
2. (a) Use CAPM to estimate the expected return for the shares of: 1) your case company; and 2) the reference company. To do this, use the yield to maturity on a 10-year Australian Government bond as a proxy for the risk-free rate and assume a market risk premium of 5%. Assume that the reference company’s beta is 0.50.
(b) Using the data from part (2a), calculate the portfolio expected return and beta, again assuming 60% and 40% weights for your case company and the reference company respectively. Prepare your presentation
Based on the data and your calculations, you now have several measures of risk and return for two stocks, a two-stock portfolio and the market. Present and discuss the measures. Incorporate relevant theory (as covered in learning resources) and background context (e.g. company/industry/market conditions, which you will need to research).
Note: There is no requirement to talk through the calculations. Simply present the measures in your slides along with important details (technique, inputs, external data sources). Focus your oral presentation on discussion (see relevant criterion in the rubric).
For this assessment, you will make two submissions through two separate submission links:
(1) “A3 video”: a maximum 5-minute video of your presentation with slides and “talking head” (that is, a video of yourself talking during the slide presentation); and
(2) “A3 pdf”: a separate pdf document of your slides. The pdf of your slides (without video) can be created with Powerpoint by using “Save As” and selecting PDF in the “Save as type” drop-down (under “File name”).
To be accepted as a valid assessment submission, your video must include (1) identification and (2) slides and video of you presenting (this only needs to be shoulders and up).
For identification, the first 10 seconds of your video should show your face and your student ID card, driver’s license or passport up to the screen. The name and photo on the ID must be clear and it must be obvious that you are holding this card. After this, you can start your presentation.
Finance for Managers, Assessment 3 Page 2 of 3
MARKING CRITERIA Excellent 30 Very Good 25 Good 20 Satisfactory 15 Developing
7.5 Inadequate 0
Part 1 calculations
20% Entirely correct.
Technique and inputs are made clear. One minor error.
Technique and inputs are made clear. Two minor errors.
Technique and inputs are made clear. Mostly correct, or entirely correct final figures with unclear technique/inputs. Mostly incorrect but uses some appropriate technique. Largely inaccurate,
incomprehensible or unattempted
Part 2 calculations
20% Entirely correct.
Technique, inputs and external data sources are made clear. One minor error.
Technique, inputs and external data sources are made clear. Two minor errors or external data sources
not provided. Technique and inputs are mostly made clear. Mostly correct, or entirely correct final figures with unclear technique/inputs. Mostly incorrect but uses some appropriate technique. Largely inaccurate,
incomprehensible or unattempted
Discussion 40% Accurately interprets all key risk and return
appropriate measures and correctly explains most
differences using relevant theory. Insightfully
supports discussion using a variety of relevant
contextual facts. Uses tables and graphs
effectively to enhance the discussion. Accurately interprets nearly all key risk and return measures.
Compares appropriate measures and correctly
explains most differences using relevant theory.
With some insight, supports discussion using a variety of relevant
contextual facts. Uses tables or graphs
effectively to enhance the discussion. Accurately interprets most risk and return
appropriate measures and correctly explains
some differences using relevant theory.
Effectively supports some discussion with relevant contextual
facts. Uses tables or
graphs but may not be effective. Accurately interprets most risk and return
measures. Compares some appropriate
measures and correctly explains some
theory may be mostly
reiterated rather than
applied. Identifies some
contextual facts but does not use them effectively. Accurately interprets some risk and return measures but other
elements are limited or incorrect. Largely inaccurate,
incomprehensible or unattempted
(posture, gesture, eye
20% Delivery techniques make the presentation
compelling and speaker appears polished and confident. Slides are
polished and effectively support the discussion. Delivery techniques make the presentation
interesting and speaker
mostly appears polished
and confident. Slides are polished and effectively support the discussion. Delivery techniques make the presentation
interesting and speaker appears comfortable.
Slides are well edited and organised, and
generally support the discussion. Delivery techniques make the presentation
understandable and speaker appears
tentative. Slides are tidy, fairly well edited and partially support the discussion. Delivery techniques detract from the
the presentation and speaker appears
uncomfortable or slides are untidy, poorly edited. Largely inappropriate
and/or slides not included, or unattempted.
Finance for Managers, Assessment 3 Page 3 of 3
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