1 | P a g e Assignment 02: Which Stock Will Perform Better? Statistics for Business and Finance (BUS5SBF) Semester 2, 2016 Submission Due Date: 21-10-2016 by 3:00PM You have been asked by your client to recommend which of two available stocks will perform better over time, relative to the market. You will need to compare risk and return relationship of the two stocks over time, and present your findings as a written report detailing your calculations and findings. The goal of this assignment is to 1. acquaint you with quantitative data analysis skills often required by different organisations 2. estimate the Capital Asset Pricing Model (CAPM) 3. provide you with feedback on your ability to carry out such tasks 4. learn how and when to use different quantitative techniques covered in the second half of this course. IMPORTANT INSTRUCTIONS: a. This is an individual assignment of worth 100 marks and contributes 15% to the total assessment in this subject. b. Please submit this assignment online using Assignment Submission Tool on LMS. c. Late submissions as per policy: For more information, visit http://www.latrobe.edu.au/policy/documents/late-submission-of-assessment-tasks-policy.pdf d. Plagiarism (as per University policy): For more information, visit http://www.latrobe.edu.au/students/academic-integrity/explanation e. Please do not copy your data set or assignment questions on the word files you are submitting since this will trigger plagiarism detection and might affect your submission. Please submit your data set as an attachment in a separate excel document. http://www.latrobe.edu.au/policy/documents/late-submission-of-assessment-tasks-policy.pdf http://www.latrobe.edu.au/students/academic-integrity/explanation 2 | P a g e Data Analyses & Report Submission Prepare your written report by taking into account the following points: Set out all your calculations for different parts of Tasks 1 and 2 below Present your results in graphs and charts as appropriate Provide all necessary steps involved, for example, five steps of hypothesis testing Explain what your results means to you, in a layman language that your client can understand. For example, what conclusions can you draw from each of your findings after performing above tasks. Your written report must be no more than Twelve (12) pages in total, including all appendices, graphs, tables, references and written answers. Answer the questions directly. Do not present unnecessary graphs or numerical measures, undertake inappropriate tests or discuss irrelevant matters. There are two main tasks involved in this assignment. Task 1: Comparison of stock returns Task 2: Estimation of CAPM and Hypothesis Testing Variables and Data Sources: PS&P = S&P 500 Price Index This is Standard and Poor index of 500 companies and will be used as market portfolio. http://finance.yahoo. ...