ACST6003: Principles of Finance - Calculate Monthly Returns for the All Ordinaries - Accounting and Finance Assignment Help

Assignment Task:

Task:

Data Description
Excel file acst6003-assignment.xlsx contains the following data:

• Annual yields on 30 day bank accepted bills (prices worksheet)
• All Ordinaries Share price index (prices worksheet)
• Share prices of Insurance Australia Group Limited (IAG) and Macquarie Group Limited (MQG) (prices worksheet)
• Dividends for IAG (dividends worksheet)
• Dividends for MQG (dividends worksheet)

Questions

1. Calculate monthly returns for the All Ordinaries (RRmm), IAG (RRIIIIII) and MQG (RRMMMMMM) using the following formula RRtt = 100 × ? PPtt PPtt−1 − 1?. Compute a monthly 30 day bank accepted bill rate as follows RRrrrr = RRaaaaaaaaaaaa 12 . (2 marks)

2. Compute EE(RR), σσ and CV for all four return/yield series over the 1/09/2000 - 1/02/2020 time period. Comment on all computed quantities in regards to the risk return trade-off. (2 marks)

3. Compute excess returns for the market, i.e. market risk premium as RRmm ee = RRmm − RRrrrr, where RRmm is the return on the All Ords computed in question 1, and RRrrrr represents the monthly return on the 30 day bank accepted bill rate. Also compute excess return for each IAG and MQG as follows RRIIIIII ee = RRIIIIII − RRrrrr and RRMMMMMM ee = RRMMMMMM − RRrrrr. Use the 1/09/2000 – 1/02/2020 time period.

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