Part 1. Reflective Learning Report (10 marks) Your group is required to write a reflective learning report on a topic assigned to your group (allocation of topics is given in the assessment folder). The following requirements must be met for this Reflective learning report to be marked: 1) Reflective learning reports must be based on the topic assigned, and the selection of a random topic will be graded zero in part 1. 2) It should be based on the content discussed in the interactive tutorial. Topic Allocation Group No Topic 1 - 20 Topic 3A: Time Value of Money 21 - 40 Topic 3B: Discounted Cash Flow Valuation 41 - 60 Topic 4: Market Efficiency, Risk-Return and Portfolio Evaluation 61 - 80 Topic 5: Valuation of Bonds and Shares 80 -100 Topic 6: Capital Budgeting I 100 onwards Topic 7: Capital Budgeting II Question 1: Critically review the financial concepts discussed and explain how those financial concepts are backed by the basic principles of finance you learned in week 1. (5 marks) Question 2: Discuss the use of the above financial concepts in real-life decision-making by (i) individuals, (ii) households and (iii) businesses. Provide examples to support your answer (5 marks) Part 2. Risk Return and Portfolio Evaluation (30 marks) Instructions: Use the historical share prices (2020 -2022) given (see the data file named Data set for Group Assignment) and answer the following questions. Select the companies for study based on the following allocation Group Number Companies for study Odd MSB/ CXO and ANZ Even AGY/ FLT and NAB Questions 1. Write a brief overview of three companies, including the following details o Industry classification o Main business operation and products, o target market and competitors (Word limit: 250 words). (6 marks) 2. Calculate the average daily return using historical stock prices (Close Price). (3 marks) 3. Using the calculated average daily return, estimate the monthly return. (3 marks) 4. Derive suitable graphs to show the volatility of monthly returns, comment on significant observations and critically review the possible reasons behind the return volatility. (5 marks) 5. Based on the calculated monthly return estimate, the risk and return (3-year average) of the selected three stocks. (3 marks) 6. Based on the monthly return estimates, calculate the correlation between these three stocks, critically review correlation values, and explain the importance of correlation in portfolio construction. (5 marks) 7. Based on the review of the correlation matrix, create a portfolio with two stocks, calculate the risk and return of the portfolio and explain whether your selected portfolio help to achieve the diversification benefit. (5 marks) Note: To prepare for part 2 of the assignment, you must participate in the interactive tutorial on Topic 4, which covers Market Efficiency, Risk-Return, and Portfolio Evaluation. Additionally, you should attend the weekly drop-in sessions (from week five onwards) to better understand the concepts and learn how to approach the assignment effectively. Marking criteria Marking criteria Weighting Part 1. Reflective Learning Report (10 marks) Question 1 5 Question 2 5 Part 2. Risk Return and Portfolio Evaluation (30 marks) Overview of companies 6 Analysis of Return (Daily and monthly) 6 Review of the volatility of return 5 Calculation of 3-year average risk and return 3 Correlation analysis 5 Portfolio evaluation 5 Total 40