Spark New Zealand Limited (SPK.NZ)

Spark New Zealand 1
SPARK NEW ZEALAND LIMITED (SPK.NZ)
By (Name)
The Name of the Class (Course)
Professor (Tutor)
The Name of the School (University)
The City and State where it is located
The Date

Spark New Zealand 2
Spark New Zealand Limited (SPK.NZ)
Question 1
Spark New Zealand Limited (SPK.NZ) is a telecommunication company found in New Zealand that specializes
in the provision of mobile network, fixed telephone network, business ICT services, and Internet Services. The
company has its headquarters in Auckland, New Zealand. It has been registered as a publicly traded company in
New Zealand since 1990; it is undoubtedly one of the largest companies found in the New Zealand Exchange
(NZX) market.
Question 2
From the closing stock prices chart below we can see that the stock prices for Spark New Zealand Limited seem
to have a upward trend especially for the period between 1st of April 2018 and 31st of May 2018. The month of
March recorded considerable lows and highs without any clear trend in the direction of daily closing stock
prices. Relaying on the overall pattern of the stock prices, it is expect that in June the company will record even
higher than before stock prices (Shaik & Maheswaran 2018).
3/1/2018
3/6/2018
3/11/2018
3/16/2018
3/21/2018
3/26/2018
3/31/2018
4/5/2018
4/10/2018
4/15/2018
4/20/2018
4/25/2018
4/30/2018
5/5/2018
5/10/2018
5/15/2018
5/20/2018
5/25/2018
5/30/2018
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
Closing Stock Prices
Close Stock Prices
3-Months
Daily Closing Stock Prices

Spark New Zealand 3
Question 3
Under a stochastic process that adheres to Geometric Brownian Motion (GBM) the drift ( μ) and volatility ( σ )
are constants that can be computed from the historical stock prices. The drift is considered to the average value
of stock returns for the stipulated period; while, volatility is the standard deviation of the stock return for the
same historical period.
Assuming the log returns (X) are given by
Xt =ln ( St
St−1
)
Formulas for Daily Drift and Volatility
^μ= 1
N −1 ∑
i=1
N −1
Xt
^σ = √ Var ( Xt )
Formula for Annualized Drift and Volatility
μ=252∗( 1
N −1 ∑
i=1
N −1
Xt )
σ = √252∗Var ( Xt )
Where 252 is the number of trading days in a year
Question 4
Assumptions
(i). The share prices are continuous in nature with regard to value and time