Investment Finance-II - Assignment Example

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Investment Finance-II

Answer – 1: HPR, AAR and GAR
The company selected for Part - A is AMP Ltd. It is a financial services company headquartered in Sydney, Australia.
a)
The monthly HPR (Holding Period Returns) can be calculated using the following formula:
HPR = (end period value – initial value)/initial value
The data for HPR is the adjusted close price of AMP Ltd starting from July 2013 to June 2015. The results of the calculation are summarized graphically below:
Variance, standard deviation, maximum and minimum is calculated using the following formulas,
Standard deviation = ; in excel, SD = stdev (array of numbers)
Variance = (SD)2
Maximum = max (array of numbers)
Minimum = min (array of numbers)
The results of calculation is summarized and shown below:-
The arithmetic average and geometric average of returns are calculated in excel using the functions AVERAGE (array of numbers) and GEOMEAN(array of numbers) and the results are shown below:
d)
Based on the given problem the number of shares bought are 11,055 as shown below
The number of shares is calculated by diving available funds with adjusted close price
Based on the given assumptions the total gain will be $ 23,598 as shown below ...Show more

Summary

Answer – 1: HPR, AAR and GAR. The company selected for Part - A is AMP Ltd. It is a financial services company headquartered in Sydney, Australia.
a) The monthly HPR (Holding Period Returns) can be calculated using the following formula…
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