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Case Study example - Investment Analysis
Finance & Accounting
Pages 6 (1506 words)
INVESTMENT ANALYSIS INVESTMENT ANALYSIS (Your name) (Your instruction) (Your (Your course) (Year) Event study Commonwealth Bank of Australia is a company that is based on Sydney Australia, it as founded in 1911 and its main line of business is provision of various banking and financial products and services to retail, small businesses corporate customers as well as institutional customers in Australia, New Zealand, the Asia pacific region, United Kingdom and the United States (Yahoo finance, 2012a)…
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The estimation period on the other hand is period between day -510 and day -11. The closing adjusted weekly prices for the Commonwealth Bank of Australia and the all ordinaries index were obtained from yahoo finance for the estimation period and the closing adjusted daily prices were also obtained from yahoo finance for the event window (Yahoo finance 2012b and 2012c). The all ordinaries index represents the market returns. Estimation of the market model The weekly returns of the Commonwealth Bank of Australia and the weekly logarithmic returns of the All Ordinaries Index were calculated using the formula ln (Pt/Pt-1) where Pt is the adjusted closing price of the security at time t and Pt-1 is the adjusted closing price of the security at time t-1. The returns of the Commonwealth Bank of Australia and the returns of the All Ordinaries Index for the estimation period as presented on a linear graph are as shown in the chart below. ...
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