Finance for Managers

Running head: FINANCE FOR MANAGERS
Finance for Managers
Name of the Student:
Name of the University:
Authors Note:

FINANCE FOR MANAGERS
1
Table of Contents
a.1) Calculating the historical monthly rates of return of the market index:.............................2
a.2) Calculating the historical average rate of return and standard deviation of your case
company; ii) the reference company; iii) the market index; and iv) an equally weighted
portfolio:.....................................................................................................................................2
b.1) Calculating the CAPM returns of 1) your case company; and 2) the reference company: 4
b.2) Calculating the portfolio expected return and beta:............................................................5
c) Discussing the risk and return measures calculated for the company and portfolio:.............6
Reference and Bibliography:......................................................................................................7

FINANCE FOR MANAGERS
2
a.1) Calculating the historical monthly rates of return of the market index:
Month All Ords Total Returns
Month Closing Index Monthly returns
Oct-18 59483.09
Nov-18 58149.2 -2.24%
Dec-18 57887.91 -0.45%
Jan-19 60199.5 3.99%
Feb-19 63843.82 6.05%
Mar-19 64292.24 0.70%
The above table provides information about the overall monthly returns of All
Ordinary index, which has been calculated from the monthly closing data. The calculation
has been conducted to fuel the further calculations of standard deviation and average returns.
The calculation in the above table has directly indicated about the fluctuations in the returns
of All Ordinary Index from October 2018 to November 2019. The changes in the overall
closing values of the index have relevantly alternated its monthly returns. Hence, it could be
understood that darting 2018 the returns of the index was negative, while in 2019 the returns
improved and became negative on monthly basis.
a.2) Calculating the historical average rate of return and standard deviation of your
case company; ii) the reference company; iii) the market index; and iv) an equally
weighted portfolio:
Month JB HiFi
(JBH)
Reference
Company
All Ords Total
Returns
Equal weighted
portfolio
Monthly
returns
Monthly
returns Monthly returns Monthly returns
Nov-18 0.74% 14.00% -2.24% 7.3700%
Dec-18 -4.45% 8.00% -0.45% 1.7750%
Jan-19 1.04% 1.00% 3.99% 1.0200%
Feb-19 1.07% -2.00% 6.05% -0.4650%
Mar-19 14.98% 3.00% 0.70% 8.9900%
Weights 50.00% 50.00%