1). Risk and return estimates

a. Use CAPM to estimate the expected return for the shares of: i) your case company; and ii) a hypothetical company with a negative beta of -0.20 as at 5 April, 2019. To do this, use the yield to maturity on that date of a 10-year Australian Government bond as a proxy for the risk-free rate, assume the market risk premium is 6% and use the companys most recent 5 year beta.

b. Using the data from part 2a, estimate portfolio expected return and beta, assuming a portfolio made up of your case company and the hypothetical company in equal weighting. 3. Risk and return analysis (15 marks): a. Drawing on expectations from theory and incorporating the overall context of your chosen company, discuss and interpret the risk and return measures from parts 2a and 2b. You may include additional measures. If so, clearly source the data and ensure you clearly explain your calculations.

Number of Employecs: 16,000 Delayed Quote* Last Updated on Apr-18-2019 12:00 AM GMT-5) CSL Limited researches, develops, manufactures, markets, and distributes biophamaceutica and alied products in Australia, the United Stes, Germamy, the United Kingdom, Switzerland, China, and intemationally. The compam operates through two segments, CSL Behring and Seqirus. The CSL Behring segment offers plasma therapies for the treatment of immunodeficiency, bleeding disorders, hereditary argioedema, Apha-1 antitrypsin deficiency, and neurological disorders operae pproximatety 14 plasma collection centers. Ih addition, this segment conducts research on plasna d non-plasrma therapies. rd receives icense and royalty, from the commerciaication o intelectuel pruperty. The Seqius segmert manufasctures and distributes non-plasma biotherapeutic pruducts, and developsinfluena vaccines CSL Limied w founded in 116 and is hedqurlered in Prkville Auslralis egioaneurological disorders. t also operates approxima 3,826.3 Total Enteprise Value 93,378.3 TEVIEBITDA 2,5225 Toral Daht 16,130. Total Deb EBITDA Currency in AUD in mm, LTM as of Dec 31 2018 TEV and Market Cap are calcuated using a close price as of Apr 17 2019 S&P Global 120,58PIASK AIl Ordinaries ndex S&PIASX 200 Index,S&PIASX 50 Index S&PIASX 200 Health Care Sector Index,S&PIASK 300 Index,S&PIASX 100 Index,S&PIASX 20 Invdex,S&P Glob 1200 Health Care Index S&PIASX 100 Indutrils S8PIASX 200 Industrial,S&PIASX 200 Phamaceuticals Biotectology& Lie Sciences Industry Group) Index S&PIASX 20 Semconductors & Semiconduclor Equipment (ndustry Group) Index S&PIASX 300 Heelth Care (Sector S&PIASX 300 Idustrials S&PIASX 300 Pharmeceulicals Bioleclnology&Life Sciences (ndustry Group) Index,3&PIASX All Australan 200,3&PIASX All Austraian 50 Index,53P Asie Pacilic BMI Phamsceuticals, Biotechnology & ife Sciencee (Subsectoy Index,5SP Asia Pecilic Ex-Japan BMl Grath Index,3&P Asis Pacitic Ex-Japan BMI Pharmaceuticels, Botechnology & Life Scences (3ubseo Index S&r Aaie Facific Ex-Jspan LagewidCap Index,S&P AUt NZBlwth Index,58P AU tNz LargeMidCap Gowth hdex.S&P Asia Paciic Ex-Japan BMI ndex 5&P Asia Pacitic Ex-lapan LargeMidCap Growth Heath C3ector) Index 5&P Asia Pacitic Over USD5 Bilion Index,S8P AU N2 OverUS05 Hilion Index: S&P Alistrala l ArgaMidCap IndAX:S&P Australia l AmaMidCap Growth Health Care (SAMr) Index:S&P All+ NZ HMI Health Care 4S Poplar Road i Pakvilla VIC | 31152 | Alistra Prona 61 3.9 1911 FAX. fil 39389 1434 Stock Quote and Chart (Cu Health Care(SRCtar) IndAX:S&1)avaloned HMI Phammaceuticak Hlatechnology & 1 lta sclaness (Subsector> Index-s& Asia Pacitk: BMI Growth IndAX:S&P Asia Pacltic BMI Groath Helth CareSantori IndAX:S&P Asla Pacltic Ex-Japan BMI Growth HRath Cana sector) Index S&P Asla Paclfic Ex-Japan BMI Health Care (Sactor) Index:&P Asla Paclfic Ex-Japan LangadCap Growth Index:S&P Asa Paclfc Ex-Japan LargeMidCap Heath Care (Sactor Index:S&P Asla Pachfic LargeMidCap Growth Indax S&P Asla Pacfic LangdCap Growth Hoalth Care (Sector Index:S&P Asia Pacfic LargeMidCap Heath Cane Scctor) rdax S&PAsia Pacfic DMI IndexS&P Acla Paclfic. LargeMidCap hdax S&P Asia Pacific LargMidCap Phamacouticals, Diotochrology & Life Sciences (Subsector) ndac S&PAU+NZ LargeMidCap Pharmaceuticals, Biotechnology& Life Sciences ubsector) Ihdex S&P AU+NZ LargdMidCap Groath Heath Care (Sector) Index:3&P Australa Bl Pharmaceuticals, Biotechnology & Life Sciences (Subsector) hdax S&P Australia LargclMidCap Health Care Sector) Ihdex S&P Australia Largc dCap Pharmaceuticals, Biotechrology & Life Sciences Subsector ndex S&P Australia BMI Heath Care (Sector) Index,S&P Developed Ex-Europe BMI Growth Index, 5&P Developed Ex-Europe BMI Phamaceuticals, Biotechnology&Life Sciences Subsectory Index S&P Developed Ex-Europe LargelidCap index,SSP Developed ExEurope LargeidCap Growth Index,S&P Developed Ex-Europe LargeMidCap Phamaceuticals, Biotechology& Life Sciences Subsector) Index,S&P Deveoped BMI Index,S&P Derveloped Ex-EuroLure BMI Growth Indea, S&P Developed BMI Growth Index,S&P Developed Ex-Europe BMI Growth Health CSector) Index,S&p Developed Ex-Cered BMI Index,S&P Developed Ex-Cenada BMI Heslh Cwe (Sector) Indeo. S&P Develuped Ex-Cansd BMI Phair leceuticals Biotechnology & Life Science Subseclo, Indes, S&P Developed Ex-CeredaLueMdCap Gro th Heelih Care 192.08 189.14 Diluted EPS Excl. Extra Items 12.6 157 92 P Diluted EPS Betore Extra 088 Avg 3M Dy Vim (mm 0.33 Eu, Euiup Phmsp DevelopG ectoo nds Gewl Helth Care (Becitor Australia Government Debt Interest Rate Profile 3.00 2.80 2.60 2.40 2.20 2.00 1.80 1.60 ustralia Government Debt 10 Year