a)Research and provide a discussion on the following Australian shares: BHP Group Limited (ASX code: BHP))
Question:
a)Research and provide a discussion on the following Australian shares:
• BHP Group Limited (ASX code: BHP))
• ANZ Group Holdings Limited (ASX code: ANZ)
• Woolworths Group Limited (ASX code: WOW)
• Telstra Group Limited (ASX code: TLS)
Within your discussion you should address, at a minimum, their management structure (along with discussion on the advantages and disadvantages of the internal/external management structures).
b)Calculate the monthly returns from February 2019 to Feb 2022 (36 months of returns) for the four shares listed above.
Tabulate the following for each security:
1. Average monthly returns.
2. Monthly variance.
(Note: do not include the month by month returns for each security. This information needs to be placed in an appendix along with the monthly share prices for the 4 shares.)
c)Using the data results from above part and 'solver' in excel, calculate the portfolio return, standard deviation and Sharpe Ratio for the following (assume a risk-free rate of return of 0.25% per annum):
• Equally weighted portfolio.
• Optimal risky portfolio (i.e. maximise the Sharpe Ratio).
• Minimum variance portfolio (i.e. minimise portfolio standard deviation).
Tabulate your results for each portfolio, ensuring that you include the weightings for each security in the portfolios. You must also include the variance-covariance matrix table.
d)Using the data results from part b) and 'solver' in excel, build an efficient frontier graph. You must have a minimum of 10 portfolios to complete the efficient frontier.
In addition to the efficient frontier graph, ensure you provide a table of your portfolios that includes (for each portfolio) the standard deviation, expected return and the weights of each security in the portfolio.
e)Discuss the shape of the efficient frontier and how it relates to Modern Portfolio Theory.
Discuss why and how a professional fund manager could maintain the ethical behaviour.
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett