Finance and Investment : PDF

Running Head: Finance and investment
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Project Report: Finance and investment

Finance and investment
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Contents
Introduction.......................................................................................................................3
Presentation of data...........................................................................................................3
Analysis and comments....................................................................................................4
Conclusion........................................................................................................................5
References.........................................................................................................................7
Appendix...........................................................................................................................8
Monthly stock price and index price and Average monthly return..............................8
Dividend table...............................................................................................................9
Standard deviation........................................................................................................9
Relationship among the company and market index..................................................10
Slope of the characteristics line..................................................................................11

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Introduction:
Finance is a department which deals in the investments study. It contains the assets
and liabilities dynamics over the time under little condition of risks and uncertainties. It is
basically a part of science which manages the money of the investors. Finance study makes it
easier for an organization to evaluate the financial performance and the stock position of an
organization. This process makes it simple for the investors and the financial analyst to judge
the stock of an organization.
In the report, investment position of Apple Inc has been evaluated on the basis of
stock price of the company of last 2 years and the index price of last 2 years. The investment
position of the company has been evaluated through identifying the average monthly return
of the company, standard deviation of the company, dividends of the company, relationship
among the market index and company and lastly, the characteristics line of apple inc stock.
The main objective of this report is to identify that whether the stock price of the
company is competitive or not. Further, the report has been prepared to measure the safety of
the investor’s return and evaluate the total associated risk with the stock price of the
company. The report also explains that how much investment could be got by the company
against the investment into the equity stock of the company. The objective of the report is to
measure the total risk and return of the stock and make a decision that whether the investment
should be done by the company in particular company or not.
Apple Inc is a technology company which is mainly based in America. The company
is operating its business at international level and headquarter of the company is in
California, America. The company has been founded in 1976 by 3 founders which are Steve
Jobs, Steve Wozniak and Ronald Wayne. The main products of the company are iPod,
iphone, Macintosh, Apple watch, apple TV, iLife, iWork, iOS etc. the company is trading in
NASDAQ: AAPL, DJIA component, S&P 500 etc. (Home, 2018). The financial performance
and non financial performance of the company is quite stunning. Main services of the
company are Apple pay, iBook store, Apple store, Mac App store, apple music etc. this is the
parent company of various subsidiary companies such as Betas electronics, Apple sales
international, Anobit, Apple worldwide video etc. The report evaluated the stock price of
NASDAQ: AAPL to measure the stock performance of the company and the investment
position of the company.

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Presentation of data:
Entire investment evaluation data of the company and the index has been given into
the appendix area. Please refer the appendix part.
Analysis and comments:
The above study on the market price of apple inc, movements into the stock price of
apple, movement in the stock price of market index, standard deviation of the stock etc
explains that whether the investors should invest into the company or not. Firstly, the
volatility in the stock price of the company has been evaluated in context with the market
index. And it has been found that the average monthly stock price return of Apple Inc is
2.53% in last 2 years whereas the stock price of IXIC is 1.52%. It explains that the stock
returns of Apple Inc are way better than IXIC.
Holding period return is the total return which is hold by an asset or the portfolio over
a period of time. It is one of the significant tools to measure the investment position and the
total return from an investment (Koller, Goedhart and Wessels, 2010). The holding period
return of both the securities explain that the changes into the stock price of Apple inc affects
the stock price of IXIC as the company is one of the top NASDAQ companies. It explains
that the stock price of Apple Inc is quite attractive as the return of the stock price of Apple
Inc is higher than the stock price of IXIC and it also explains that the performance of the
stock of Apple Inc is better (Madhura, 2011).
Further, the dividends of Apple Inc have also been recognized. Dividends are the total
amount which is paid by an organization to its shareholder against the total equity investment
(Higgins, 2012). On the basis of dividend evaluation, it has been found that the dividend
yield of the company express that the total dividend of the company has been enhanced by
9.52% in May 11, 2017 from last year. And currently the dividend amount of the company is
same from last 1 year. In addition, the risk of the stock of the company has been evaluated.
On the basis of the standard deviation calculations, it has been identified that the standards
deviation of Apple Inc is 5.183% and the standard deviation of IXIC is 2.51% (Yahoo
Finance, 2018).
Further, standard deviation is a measure to identify the dispersion of a particular data
on the basis of its mean. It is also calculated as the square root of variances through
evaluating and determining the variances among the each point of the mean (Kaplan and

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Atkinson, 2015). Standard deviation is a statistical measurement which is applied on the
holding period return of the company. It explains that the greater the standard deviation o a
stock, the greater the variance among the mean and the price (Yahoo finance, 2018).
The standard deviation result explains that the stock price of the Apple Inc is quite
riskier than the stock price of index. However, it has also been recognized that the return of
Apple Inc’s stock is also higher (Gibson, 2011). Further, it has been found that the risk level
of Apple Inc is higher due to large difference among the mean and the stock price of the
company. It explains that the process range of the company is higher and it explains that the
stock price of the company could be volatile at any time with huge changes into the stock
price (Yahoo Finance, 2018).
Further, it has been found that the characteristics line of the Apple Inc and IXIC
explains about the performance of the Apple stock on the basis of IXIC. On the basis of
characteristics line of the company, it has been found that the beta of the company is bit
higher than the IXIC stock as the price range of the apple stock is higher as well as the
volatility level of apple stock is also higher (Hogarth and Makridakis, 2011).
On the basis of the above evaluation on the stock price of apple and market index
performance, it has been found that the investor should invest into the stock of apple as the
investment would offer the short term (stock average return is higher than the market return)
as well as long term return (dividend amount is quite stable and competitive) to the investors
of the company (Yahoo finance, 2018). Further, it has been found that the risk level of the
company is bit higher than the market index risk because of high price range. But the
volatility brief that with the higher risk, the return of the company is also higher.
And thus, it has been recommended to the investors to invest into the stock
price of Apple Inc for a longer period to enhance the total return of the investors. However,
the short term investment would also offer return to the company. But the level of short term
return is lower than the long term investment.
Conclusion:
To conclude, the investment analysis of Apple Inc has been done in the report on the
basis of the total return of the company and the associated risk of the company. The
investment analysis is a crucial step which makes it easier for the investors to make a better
decision about the investment into a particular security. In the report, stock price of apple inc

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has been evaluated on the basis of IXIC to measure the total holdings return of the company
and the standard deviation of the comapny.
The total holdings return of Apple Inc and IXIC explain that the average return of
Apple Inc is higher in the market in context with the IXIC stock price. It explains that the
investment into the stock of Apple Inc would offer huge return than the industry. However,
the associated risk of apple Inc brief that the standard deviation of Apple Inc is 5.18% and the
IXIC is 2.51%. It explains that the risk of the Apple Inc is quite higher. On the basis of the
study, it has been concluded that with the higher return the investors are always have to bear
the higher risk. Though, the investment into the apple stock would be beneficial for the
investors as they would be able to get higher returns from the market. The short term
investment as well as long term investment into the stock of apple is good option for the
investment as in short term, the investor could sold the stock in the market in higher price as
well as in longer period, the high dividend could be enjoyed by the investors.

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References:
Gibson, C.H., 2011. Financial reporting and analysis. South-Western Cengage Learning.
Higgins, R.C., 2012. Analysis for financial management. McGraw-Hill/Irwin.
Hogarth, R.M. and Makridakis, S., 2011. Forecasting and planning: An
evaluation. Management science, 27(2), pp.115-138.
Home. 2018. Apple Inc. (Online). Available at: https://www.apple.com/lae/ (accessed
15/05/2018).
Kaplan, R.S. and Atkinson, A.A., 2015. Advanced management accounting. PHI Learning.
Koller, T., Goedhart, M. and Wessels, D., 2010. Valuation: measuring and managing the
value of companies (Vol. 499). john Wiley and sons.
Madura, J., 2011. International financial management. Cengage Learning.
Yahoo finance. 2018. Apple Inc. (Online). Available
at:https://finance.yahoo.com/quote/AAPL/history?
period1=1462041000&period2=1525026600&interval=1mo&filter=history&frequency=1mo
(accessed 15/05/2018).
Yahoo Finance. 2018. IXIC. (Online). Available
at:https://finance.yahoo.com/quote/%5EIXIC/history?
period1=1462041000&period2=1525026600&interval=1mo&filter=history&frequency=1mo
(accessed 15/05/2018).

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Appendix:
Monthly stock price and index price and Average monthly return:
Apple Inc IXIC
Price
Return ((P1-
P0)/P0) Price
Return ((P1-
P0)/P0)
01-04-
2016 93.28
4958.0
8
01-05-
2016 95.90 2.81%
4948.0
5 -0.20%
01-06-
2016 92.37 -3.68%
4842.6
7 -2.13%
01-07-
2016
100.6
9 9.01%
5162.1
3 6.60%
01-08-
2016
102.5
1 1.81%
5213.2
2 0.99%
01-09-
2016
109.8
2 7.13% 5312 1.89%
01-10-
2016
110.3
0 0.43%
5189.1
4 -2.31%
01-11-
2016
107.3
6 -2.66%
5323.6
8 2.59%
01-12-
2016
113.0
9 5.33% 5444.5 2.27%
01-01-
2017
118.4
9 4.77%
5614.7
9 3.13%
01-02-
2017
133.7
6 12.89%
5825.4
4 3.75%
01-03-
2017
140.8
8 5.32%
5911.7
4 1.48%
01-04-
2017
140.8
7 -0.01%
6047.6
1 2.30%
01-05-
2017
149.8
0 6.34%
6198.5
2 2.50%
01-06-
2017
141.8
2 -5.33%
6140.4
2 -0.94%
01-07-
2017
146.4
5 3.27%
6348.1
2 3.38%
01-08-
2017
161.4
9 10.27%
6428.6
6 1.27%
01-09-
2017
152.3
6 -5.66%
6495.9
6 1.05%
01-10-
2017
167.1
1 9.68%
6727.6
7 3.57%
01-11-
2017
169.8
8 1.66%
6873.9
7 2.17%
01-12- 167.9 -1.17% 6903.3 0.43%

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2017 0 9
01-01-
2018
166.1
1 -1.06%
7411.4
8 7.36%
01-02-
2018
176.7
2 6.38%
7273.0
1 -1.87%
01-03-
2018
167.1
4 -5.42%
7063.4
5 -2.88%
01-04-
2018
164.6
3 -1.50%
7066.2
7 0.04%
2.53% 1.52%
Dividend table:
Dividend payment
Price Return
Feb 9, 2018 0.63 0.00%
Nov 10, 2017 0.63 0.00%
Aug 10, 2017 0.63 0.00%
May 11, 2017 0.63 9.52%
Feb 9, 2017 0.57 0.00%
Nov 3, 2016 0.57 0.00%
Aug 4, 2016 0.57 0.00%
May 5, 2016 0.57
Standard deviation:
Apple Inc IXIS
Date Price
Return
((P1-
P0)/P0)
Return -
mean
(Return
-
mean)^
2 Price
Return
((P1-
P0)/P0)
Return -
mean
(Return
-
mean)^2
01-04-
2016 93.28 4958.08
01-05-
2016 95.90 2.81% 0.28% 0.001% 4948.05 -0.20% -1.72% 0.030%
01-06-
2016 92.37 -3.68% -6.21% 0.386% 4842.67 -2.13% -3.65% 0.133%
01-07-
2016 100.69 9.01% 6.48% 0.420% 5162.13 6.60% 5.08% 0.258%
01-08-
2016 102.51 1.81% -0.71% 0.005% 5213.22 0.99% -0.53% 0.003%
01-09- 109.82 7.13% 4.60% 0.212% 5312 1.89% 0.38% 0.001%

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2016
01-10-
2016 110.30 0.43% -2.09% 0.044% 5189.14 -2.31% -3.83% 0.147%
01-11-
2016 107.36 -2.66% -5.19% 0.269% 5323.68 2.59% 1.07% 0.012%
01-12-
2016 113.09 5.33% 2.81% 0.079% 5444.5 2.27% 0.75% 0.006%
01-01-
2017 118.49 4.77% 2.25% 0.051% 5614.79 3.13% 1.61% 0.026%
01-02-
2017 133.76 12.89% 10.36% 1.074% 5825.44 3.75% 2.23% 0.050%
01-03-
2017 140.88 5.32% 2.80% 0.078% 5911.74 1.48% -0.04% 0.000%
01-04-
2017 140.87 -0.01% -2.53% 0.064% 6047.61 2.30% 0.78% 0.006%
01-05-
2017 149.80 6.34% 3.82% 0.146% 6198.52 2.50% 0.98% 0.010%
01-06-
2017 141.82 -5.33% -7.86% 0.618% 6140.42 -0.94% -2.46% 0.060%
01-07-
2017 146.45 3.27% 0.74% 0.006% 6348.12 3.38% 1.86% 0.035%
01-08-
2017 161.49 10.27% 7.74% 0.599% 6428.66 1.27% -0.25% 0.001%
01-09-
2017 152.36 -5.66% -8.18% 0.669% 6495.96 1.05% -0.47% 0.002%
01-10-
2017 167.11 9.68% 7.15% 0.512% 6727.67 3.57% 2.05% 0.042%
01-11-
2017 169.88 1.66% -0.86% 0.007% 6873.97 2.17% 0.66% 0.004%
01-12-
2017 167.90 -1.17% -3.70% 0.137% 6903.39 0.43% -1.09% 0.012%
01-01-
2018 166.11 -1.06% -3.59% 0.129% 7411.48 7.36% 5.84% 0.341%
01-02-
2018 176.72 6.38% 3.86% 0.149% 7273.01 -1.87% -3.39% 0.115%
01-03-
2018 167.14 -5.42% -7.95% 0.632% 7063.45 -2.88% -4.40% 0.194%
01-04-
2018 164.63 -1.50% -4.03% 0.162% 7066.27 0.04% -1.48% 0.022%
2.53%
∑∣x−μ
∣2 6.446% 1.52%
∑∣x−μ
∣2 1.508%
Std Dev 5.183% Std Dev 2.506%
Relationship among the company and market index:

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-0.20%
6.60%
1.89%
2.59%
3.13%
1.48%
2.50%
3.38%
1.05%
2.17%
7.36%
-2.88%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
2.81%
-3.68%
9.01%
1.81%
7.13%
0.43%
-2.66%
5.33%4.77%
12.89%
5.32%
-0.01%
6.34%
-5.33%
3.27%
10.27%
-5.66%
9.68%
1.66%
-1.17%-1.06%
6.38%
-5.42%
-1.50%
Apple Inc
Apple Inc
Slope of the characteristics line:
-0.1 -0.05 0 0.05 0.1 0.15
-0.04
-0.02
0
0.02
0.04
0.06
0.08
f(x) = 0.213709521422904 x + 0.0097826085833919
R² = 0.195279250892375
Characteristics Line
IXIS
Linear (IXIS)
Axis Title
Axis Title