FIN510 Assignment: Financial Performance and Investment Strategy

This assignment, prepared for FIN510 Aspects of Corporate Finance, analyzes the financial performance of five companies: AMP.AX, ANZ.AX, CBA.AX, NAB.AX, and QAN.AX, along with the ASX200 market index, from January 2015 to December 2017. It calculates and compares average returns, standard deviations (volatility), and betas for each stock and a portfolio, offering insights into risk assessment and investment strategies. The analysis includes calculating average returns using the formula Returnt = (Pt − Pt−1) / Pt−1 × 100, where Pt is the current share price and Pt-1 is the previous period's share price, and determining the average return of a portfolio with equal weights for each share. The assignment further assesses risk through standard deviation and beta calculations, interpreting the results to evaluate the volatility and systematic risk of each stock relative to the market. The final section provides investment recommendations based on risk-return analysis and CAPM, suggesting which stocks are underpriced, overpriced, or correctly priced and offering advice on portfolio composition.