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Portfolio Management Assignment : Tesco

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Added on  2021-04-21

Portfolio Management Assignment : Tesco

   Added on 2021-04-21

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RUNNING HEAD: Portfolio management1Name of the studentTopic-Portfolio investmentUniversity name
Portfolio Management Assignment : Tesco_1
Portfolio management2In this report, six companies have been selected to prepare the portfolio. There are six companies named such asRisk free return companyVanguard Australian Government Bond ETF (VGB.AX)SPDR S&P/ASX Australian Govt Bd ETF (80084.AX)Russell Inv Australian Government Bd ETF (80068.AX)Risky Assets BHP BillitonWesfarmersTescoAfter evaluating the excel file attached in this report, it is observed that Wesfarmers and BHPBilliton is less risky company and more weighted is given to these companies to invest more money. The minimum variance portfolio of these three companies are given as belowMinimum Variance Portfolio Weighted 59%26%15%YearBHP WesfarmersTesco1-0.14950.01345820.159872-0.0469-0.013732-0.05923-0.01720.0051107-0.0323There are below given data for these three companies ParticularBHPWes farmerTescoAverage rateof return 0.0041 0.0057 0.0001 StandardDeviation 0.09641 0.05080 0.06676 Correlation ofcoefficient0.2104310580.0045947370.121230764It shows that Wesfarmers has higher average return as compared to other risky companies. On the other hand, the standard deviation of the BHP is also very high. The correlation of coefficient is also high in case of Wesfarmers and Tesco.
Portfolio Management Assignment : Tesco_2
Portfolio management3There are below given weighted to each four stocks which reflect that risky assets weightage is high with a view to earn more return. Optimum risk portfolioWeight 10.178Weight 20.292Weight 30.239Risk free assets0.291Exp ret0.086Std dev0.154Sharpe ratio0.236Computation of the Beta for all these three risky companies The beta of the company reflects the changes in the share price of company on the basis of market premium. All these companies have different Beta which reflects the changes in shareprice based on the market factors. Computation of the beta of BHP BillitonSUMMARY OUTPUTRegressionStatisticsMultiple R0.022597R Square0.000511Adjusted R Square-0.02978Standard Error0.032028Observations35ANOVAdfSSMSFSignificanceFRegression11.73E-051.73E-050.0168590.897481Residual330.0338510.001026Total340.033868CoefficientsStandardErrort StatP-valueLower95%Upper95%Lower95.0%Upper95.0%Intercep0.001550.0054320.2850.776-0.01260-0.01260
Portfolio Management Assignment : Tesco_3

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