(i) Select two listed companies as you like.
(ii) Obtain data from annual report, database, financial medias, etc.
(iii)For each company selected in (i), discuss the performance of its stock.
Hint: You may use the knowledge covered in Topic 2 and descriptive statistics of historical return data (e.g. mean, standard deviation, minimum, maximum values, etc.) to support your answer.
(iv) Use the Capital Asset Pricing Theory to evaluate the fair value of stock for each company. You may use diagrams to illustrate your answer.
(v) Use the performance measures covered in EC3119 to compare the performances of the two stocks.
(vi) Discuss your investment strategy.
(vii) Provide other relevant information to support your conclusions.
Suggested Format:
(i) The academic style, and
(ii) Generally, you should include (1) Introduction (2) Data Description (3) The methods (4) Empirical Results & Findings: (5) Conclusions.
Please make sure your report looks professional and provides sufficient evidence to justify your conclusion.
YOU SHOULD NOTICE:
- Proxies for Rf and Market benchmark portfolio
- Data sources
- Sample size, Sample period and Data Frequency
- Plotting SML and/or CML
- Investment strategy & short selling
Submission Details: Word Limit: 2,500 words (excluding reference list, appendix and footnotes).
Double spaced font size 12 with Harvard Referencing Style.
Submission Format: Typed and submitted via the Assignments page on Canvas; Please Submit Two files (a word file of your report and an excel file of your calculation work)
There is a 1% penalty for every 100 words over the word limit of 2,500 words. The front page of the assignment should contain your name, I.D. number, title, and accurate word count.
You must include page numbers on your assignment.
Please include the following declaration on your cover page:
“I hereby declare that this work is entirely my own and has not been submitted as part of any other examination or assignment. Any use of the work of others in this assignment is duly acknowledged.”