Masters of Professional Accounting

Running head: MASTERS OF PROFESSIONAL ACCOUNTING
Masters of Professional Accounting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

1MASTERS OF PROFESSIONAL ACCOUNTING
Table of Contents
Question 1:.......................................................................................................................................3
a) Monthly deposit needed for holiday:...........................................................................................3
bi) Indicating whether investment will be purchased:.....................................................................3
bii) Cash flow at the end of year 2:..................................................................................................4
ci) Gaye’s financial assets value at the age of 60:...........................................................................4
cii) Monthly pension amount for Gaye after retirement:.................................................................5
Question 2:.......................................................................................................................................5
i) Explaining about Real Rate of Interest with adequate example:.................................................5
ii) Stating about negative gearing in context of Australian housing market:..................................6
Question 3:.......................................................................................................................................7
i) Defining risk in terms of investment:...........................................................................................7
ii) Discussing about the Australian dividend-imputation credit system for Australian and
international investors:.....................................................................................................................7
iii) Monthly returns of BHP in $ and %:.........................................................................................8
iv) Average monthly return of BHP:...............................................................................................8
v) Annual holding period for international shareholders:................................................................8
vi) Annual holding period for Australian shareholders:..................................................................9
vii) MKT monthly returns:..............................................................................................................9
viii) Average monthly return for MKT:...........................................................................................9
ix) Annual holding period return:....................................................................................................9
x) Graph for BHP and MKT:.........................................................................................................10
xi) Standard deviation for both BHP and MKT:...........................................................................10

2MASTERS OF PROFESSIONAL ACCOUNTING
xii) identifying the risk of BHP:....................................................................................................10
xiii) CAPM value for BHP:...........................................................................................................11
xiv) SML in scatter graph:.............................................................................................................11
xv) SML line with actual return of BHP:......................................................................................12
xvi) Return and beta for portfolio:.................................................................................................12
References:....................................................................................................................................13

3MASTERS OF PROFESSIONAL ACCOUNTING
Question 1:
a) Monthly deposit needed for holiday:
bi) Indicating whether investment will be purchased:
The company should accept the project, as IRR is higher than the discounting rate and
NPV is positive.