Managing Finance Assignment Report

MANAGING FINANCE
Name of the student
Name of the University
Author’s Note

Introduction
 WHO, World Health Organization 1st declared COVID 19 is a
pandemic all over the world.
 Global Economy could shrink by approximately 1% in 2020 due to
COVID-19 Pandemic Which is opposite reflection of 2.5% growth.
 An unpredictable reaction in financial market due to COVID 19

Selected Stock
 Australia and New Zealand Banking group Limited
Price= 15.52
Market cap= 46.91B
 CSL Limited
Price= 324.15
Market cap= 147.122B

Data Analysis
 Data collected from Yahoo finance
 Taking period- 30-Nov-2019 to 31-Mar-2020

Geometric Mean return
Calculation of Geo-mean return for both the stocks are as follows:
ANZ- 0.995
CSL- 1.001
Geometric return indicates the compound effect of return and the
performance of the stock.

Risk
Total risk= Systematic risk + Unsystematic risk
ANZ CSL Rm
Systematic risk (β) 0.584 0.973
Unsystematic risk
(STDV) 0.031 0.034 0.026
Total Risk 0.615 1.007

Systematic risk
 ΒETA of ANZ= 0.584
 ΒETA of CSL= 0.973
Beta <1 Defensive stock
Beta >1 Aggressive stock
Beta =1 Stock at per

Risk adjusted return
Sharp ratio= (return of stock – risk free rate)/STDV
ANZ CSL
Expected return -0.0042 0.0011
Rf 0.000026
Er-Rf -0.00421 0.00105
STDV 0.031 0.03403
Risk adjusted return -13.61% 3.07%

Recommendation
Qualitative factor
ANZ
PE ratio= 8.19
EPS= 2.02
CSL
PE ratio= 73.80
EPS= 4.42

Impact of the stock
All the stock price has shown 5% down, ANZ is optimistic in a long term view with the
effective policy and swift action, this would be three, four and five months impact.
CSL noted that current situation presents a number of challenges to its plasma collection
operations, therefore the company anticipated modest delays across the capital projects.
Many of the investors has faced loss during this time. But CSL shown the positive growth,
where an investor can expect to go for long.
Due to the spread of Corona Virus, rating agency FITCH has downgraded the ratings of
Australian bank to A+ from AA- the bank stock came under the significant pressure
because of this outbreak.
Due to this COVID 19, millions of workers has faced loosing of their jobs, the world is
starting at a recession, economic output in June 2020. There has been seen much more
volatility in the market.

Bibliography
 Fernandes, N., (2020). Economic effects of coronavirus outbreak (COVID-19) on the
world economy. Available at SSRN 3557504.
 Massart, E.M., Hendrickx, J.M. and Absil, P.A., (2015). Approximate matrix geometric
means based on the inductive mean.
 Waemustafa, W. and Sukri, S., (2016). Systematic and unsystematic risk determinants of
liquidity risk between Islamic and conventional banks. International Journal of
Economics and Financial Issues, 6(4), pp.1321-1327.
 Livingston, M., & Zhou, L. (2016). Information opacity and Fitch bond ratings. Journal
of Financial Research, 39(4), 329-357.
 Lorig, M., & Sircar, R. (2016). Portfolio optimization under local-stochastic volatility:
Coefficient taylor series approximations and implied sharpe ratio. SIAM Journal on
Financial Mathematics, 7(1), 418-447.

Thank You…..