FIN2101 - Annual Returns of Stock and Hong Leong Bank Bhd Case Study - Finance Assignment Help

Assignment Task

We name these two stocks Stock 1 and Stock 2, and answer the following questions by using the statistical or mathematical software, including SPSS, Excel, or others:
 

a. Calculate the annual returns of Stock 1, Stock 2, and KLCI from year 2010 to year 2013. For simplicity, you might ignore the dividend payments in your calculation. (Calculation must be done manually)

b. Use the annual returns calculated in Part a to calculate average annual returns and standard deviation of the annual returns for Stock 1, Stock 2, and KLCI. (Calculation must be done manually)

c. Determine the betas of Stock 1 and Stock 2 using the annual returns calculated in Part a. Comment on your results. (You can use any software to assist in beta calculation)

d. Form a portfolio called Portfolio P which invests 30 percent of your funds in Stock 1 and 70 percent in Stock 2. Calculate the average annual return, standard deviation, and beta for Portfolio P. Explain your results.

e. If the Capital Asset Pricing Model holds for Stock 1, Stock 2, and Portfolio P, is it good to buy? Evaluate them one by one and provide proper explanation on your results. Assuming the risk free rate is 2%.

Question 2
 

What are the implications if a company under invest in net working capital?

Question 3
 

Is it true that operations of a company run more smoothly the more current assets it has? Should a company then operate with huge amounts of account receivables and inventories? Discuss.

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