Finance for Managers FIN6554 (FIN6013)
Lecturer: Dr. Abdolhossein Zameni (Pejman)
Submission Deadline: Week 7_ 1/11/2020
Please refer to the assignment for the instructions.
Part A (100%)
Find 10 years share price and dividends’ of two Malaysian publicly listed companies and subsequently answer the questions a, b and c below.
a) Critically analyse the basis of choosing the companies. (10 marks)
b) Calculate the discretely compounded annual returns and the respective risk for both firms.
Analyse your answer. (20 marks)
c) Calculate the continuously compounded annual returns and the respective risk for both firms.
Which is the better investment of the two? Analyse your answer. (20 marks)
Show all the calculation
Suppose that the annual returns on two shares are perfectly negatively correlated and that ????= 0.07,
????= 0.20,???? = 0.12 , and ???? = 0.5. Assuming that there are no arbitrage opportunities, by using the Goal Seek function (excel) calculate the weight (proportion) of the two assets that produce the lowest portfolio variance? (Use the Goal Seek function) (30 marks)
You believe that there is a 20% chance that Astro company’s share will drop by 11% and 80% chance that it will increase by 17%. In addition, there is a 25% chance that OCK Group Berhad company’s share will drop by 15% and a 75% chance that it will increase by 24%. The covariance is 0.009. Calculate the expected return, the variance, the standard deviation, and the correlation
for each share. (20 marks)
PART B: (100%)
You are 30 years old today and decided to apply for a postgraduate in finance. Your current annual salary is RM36,000 and is expected to grow by 4% annually. Graduates in finance earns RM50,000 upon graduation, with salaries growing by 3.5% yearly. Cost of the 2 years of study is RM25,000 per year which should be paid at the end of each study year. If your retirement age is 67 and the discount rate is 7% annually, is it worthwhile to quit your current job and do your postgraduate?
What is the IRR of your study? (50 marks) Question 5
Analyse the FOUR (4) advantages and disadvantages of fund raising either from bond or share to the company’s performance. (50 marks)
Requirement of the assignment:
The length of assignment is between 1,800 to 2,000 words (part A: 1000 words, Part B: 1000 words), tables, figures, appendices, etc. The assignment should be arranged in the following manner:
• Individual Assignment Cover Sheet- SEGi
• Title page
• Table of contents
• Body of assignment including, introduction, content and conclusion • References – Minimum 10 references. Use Harvard system.
• Appendix • Turnitin Report
a. The similarity index should be as minimum as possible (e.g., it should be less than or equal to 15%). Report that exceeds 15% or without the Turnitin report will not be graded. 5 marks will be deducted from the total marks graded for violating this rule.
b. To submit Turnitin Originality Report online and print the cover page – Please use your full name to create the account.
• Resubmission to improve the grade of assignment is allowed. Resubmission is only allowed for one time and within a stipulated period before the final exam.
• The maximum mark of re-work assignment is 65/100.
Late Submission policy
• The penalty for late submission is as follow which is in line with the University’s Academic Regulations and Policies, 2017 (Ref pdf; Section 6.6.3 and Section 6.6.4).
No Days Late Penalty
1 1-5 Days 1 mark deducted per day up to maximum of 5 marks
2 6-10 days 2 marks deducted per day from day 6-10 plus the 5 marks deducted from days 1 -5 up to maximum of 15 marks
3 11-15 days Will only be able to secure a pass grade 50% provided the work is secure more than 50%. For work that has secured less than 50%, the marks will be maintained
4 Submission Will not be accepted after 16 days
Assessment Criteria And Grading Sheet
Relevance Knowledge Analysis Argument and Structure Critical Evaluation Presentation Reference to
80-100 % The work examined is exemplary and provides clear evidence of a complete grasp of the knowledge, understanding and skills appropriate to the Level of the qualification. There is also ample excellent evidence showing that all the learning outcomes and responsibilities appropriate to that Level are fully satisfied. At this level, it is expected that the work will be exemplary in all the categories cited above. It will demonstrate a particularly compelling evaluation, originality, and elegance of argument, interpretation or discourse.
75-79 % The work examined is outstanding and demonstrates comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is also excellent evidence showing that all the learning outcomes and responsibilities appropriate to that level are fully satisfied. At this level, it is expected that the work will be outstanding in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse.
70-74 % The work examined is excellent and is evidence of comprehensive knowledge, understanding and skills appropriate to the Level of the qualification. There is also excellent evidence showing that all the learning outcomes and responsibilities appropriate to that level are satisfied. At this level, it is expected that the work will be excellent in the majority of the categories cited above or by demonstrating particularly compelling evaluation and elegance of argument, interpretation or discourse.
65-69 % Directly relevant to the requirements of the assessment A substantial knowledge of relevant material, showing a clear grasp of themes, questions and issues therein Comprehensiv e analysis – clear and orderly presentation Well supported, focused argument, which is clear and logically structured. Contains distinctive or independent thinking;
and begins to formulate an independent position in relation to theory and/or practice. Well written, with standard spelling and grammar, in a readable style with acceptable format Critical appraisal of up-to-date and/or appropriate literature. Recognition of different perspectives. Very good use of a wide range of sophisticate d source material.
60-64% Some attempt to address the requirements of the assessment: may drift away from this in less focused passages Adequate knowledge of a fair range of relevant material, with intermittent evidence of an appreciation of its significance Significant analytical treatment which has a clear purpose Generally coherent and logically structured, using an appropriate mode of argument and/or theoretical mode(s) May
distinctive or independent thinking;
to formulate an independent position in relation to theory and/or practice. Competently written, with only minor lapses from standard grammar, with acceptable format Uses a good variety of
literature, which includes recent texts, and/or appropriate literature, including a
substantive amount beyond library texts.
Competent use of
50-54 % Some correlation with the requirements of the assessment but there are instances of irrelevance Basic understanding of the subject but addressing a limited range of material Some
analytical treatment, but may be prone to description, or to narrative, which lacks clear analytical purpose Some
attempt to construct a coherent argument, but may suffer loss of focus and consistency, with issues at stake stated only vaguely, or
theoretical mode(s) couched in simplistic terms Sound work which expresses a coherent position only in broad terms and in uncritical conformity
to one or more standard views of the topic A simple basic style but with significant deficiencies in expression or format that may pose obstacles for the reader Evidence of use of appropriate literature,
which goes beyond that referred to by the tutor. Frequently only uses a single source to support a point.
45-49 % Relevance to the requirements of the assessment may be very intermittent, and may be reduced to its vaguest and least challenging terms A limited understanding of a narrow range of material Largely descriptive or narrative, with little evidence of analysis A basic argument is evident, but mainly supported by assertion and there may be a lack of clarity and coherence Some
evidence of a view starting to be formed but mainly derivative. Numerous
deficiencies in expression and presentation; the writer may achieve
clarity (if at all) only by using a simplistic or repetitious style Barely adequate use of literature. Over reliance on Material provided by the tutor.
The evidence provided shows that the majority of the learning outcomes and responsibilities appropriate to that Level are satisfied – for compensation consideration.
40-44 % The work examined provides insufficient evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence provided shows that some of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in some of the indicators.
20-39 % The work examined is unacceptable and provides little evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence shows that few of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in several of the indicators.
0-19 % The work examined is unacceptable and provides almost no evidence of the knowledge, understanding and skills appropriate to the Level of the qualification. The evidence fails to show that any of the learning outcomes and responsibilities appropriate to that Level are satisfied. The work will be weak in the majority or all of the indicators.
As a postgraduate student, there is no excuse for poor spelling, bad grammar, or lack of formatting. Use one and half spacing with 12- point font and pages must be numbered. Use New Times Roman.
Table of contents and numbering
A comprehensive table of contents is required, with section numbers, section headings, and page numbers. It will include the List of references, a List of appendices, a List of figures, and a List of tables, all with page numbers indicated. All sections and pages should be fully numbered.
An Introduction should be provided at the beginning to summarize the structure of the following sections of the report/assignment. The introduction does not contain theory, nor does it contain any conclusions or recommendations.
Body of assignment
This is an academic assignment, so it is essential that your statements be justified by relevant academic theory. For example, don’t just use terms like ‘stakeholder’– explain why you selected those terms, and the academic theory to justify their use. A major failing of students is to simply ‘describe’ the processes that have happened. At postgraduate level, you are expected to be able to apply recognized theory to situations, and form opinions. You will often find conflicting opinions from so-called ‘experts’. You should be developing analytical and communication skills. Students coming from other universities, and especially overseas students, find this need for ‘analysis’ the most difficult transition to make to Australian university study. You are expected to use your judgment to analyze problems, make value judgments as to whether it is good or bad (or both), use existing academic theory from a range of sources to justify your position, and to argue whether something is valid or not. In the study of management, there is no right or wrong answers, only lots of opinions, many of which change over a period of time. Show that you can act as managers, and communicate your opinions. Major sections should start on a new page. You will be surprised just how much more readable it makes your assignment / report.
Referencing is NOT just inserting a list of publications at the end of the report and this is not acceptable. Referencing is NOT just inserting a citation at the end of each paragraph and is not acceptable.
At postgraduate level, you are expected to cite at least 10 to 15 different sources of reference material, and to make multiple references to such material. References MUST be cited using Harvard system (which is author/date). Please do not use footnotes, etc. Read your Communication skills handbook for information on how to cite reference materials. References must be listed alphabetically by author in a single List of References at the end of each assignment. Do not put multiple lists of references at the end of each section or part.
Figures and tables
There are many instances where diagrams and tables would assist in the communication of information, and the reduction of word length. For example, if a stakeholder analysis were required, it would be much more clearly understood if presented in a table. Figures and tables must be numbered in some logical way, so they can be listed on the Contents page, and referred to in the text. A recommendation is that you call it Figure/Table X.1, X.2 etc. where ‘X’ represents the section number. Consecutive numbering through the whole document (rather than by section) can mean lots of renumbering if there are changes. Tables should not run over onto following pages. Start them on a new page to avoid this. If they are multi-page tables, then think about making them into an appendix. Use a smaller font (10 point) and single line spacing to reduce the size of tables.
Larger amounts of relevant material (such as sample documents or supporting material) should be put at the end of the assignment in an Appendix after the List of References. Smaller charts or summaries could be located in the text, but anything over a page becomes a distraction. Appendices should be numbered sequentially (Appendix 1, Appendix 2, etc). Unnecessary and irrelevant information should not be attached. Size of assignments has no bearing on marks achieved.