Financial Report Analysis: Investment, Risk Assessment, and Returns

This report presents a financial analysis focusing on market returns, risk assessment, and investment strategies. The analysis includes calculating daily, monthly, and yearly market returns, as well as determining the total and systematic risk. The report also delves into the unsystematic risk associated with a specific stock, Bendigo and Adelaide Bank Ltd. The author suggests a diversified portfolio to manage risk, highlighting the importance of beta in investment decisions. The report also references academic literature to support the financial assessments and investment recommendations. The report suggests to limit investment in the stock to 10% of the portfolio due to its high beta and potential impact on the overall portfolio risk.

Running head: MANAGING FINANCE
Managing Finance
Name of the Student:
Name of the University:
Authors Note:

1
MANAGING FINANCE
Table of Contents
1. Calculating the monthly market returns, Daily market returns and yearly market returns:...2
2. Calculating the Total risk and annual standard deviation:.....................................................2
3. Calculating the Systematic risk:.............................................................................................2
4. Calculating the Unsystematic risk:.........................................................................................2
5. Relevant suggestion:..............................................................................................................2
5a. Mentioning the overall basis in which stock could be selected as good investment:..........2
5b. Mentioning the reason behind investing in stock:................................................................3
Reference:..................................................................................................................................4

2
MANAGING FINANCE
1. Calculating the monthly market returns, Daily market returns and yearly market
returns:
Daily returns 0.04%
Monthly average 1.23%
Yearly returns 15.74%
2. Calculating the Total risk and annual standard deviation:
Total risk 1.39%
Yearly standard deviation 26.49%
3. Calculating the Systematic risk:
Beta 1.11
4. Calculating the Unsystematic risk:
Unsystematic risk 1.25386%
5. Relevant suggestion:
5a. Mentioning the overall basis in which stock could be selected as good investment:
The returns provided by Bendigo and Adelaide Bank Ltd are mainly depicting the
overall viability, which could provide higher retunes from investment. In addition, the overall

3
MANAGING FINANCE
returns on annual basis are mainly at 15.74%, which depicts the overall viability of the
investment. Moreover, the unsystematic risk if also at 1.25386%, which is relatively low and
could reduce the risk from changing policies. The overall returns are mainly helpful in
generating higher return from investment. However, the overall beta is mainly at 1.11, which
is relatively high, which in turn could increase risk from investment. On the contrary,
Gagliardini and Gourieroux (2013) argued that higher beta in stock directly indicate
vulnerability of the stock, which in tune could hamper return from investment.
5b. Mentioning the reason behind investing in stock:
The overall shares of Bendigo and Adelaide Bank Ltd has a relevant higher beta,
which might increase risk of the portfolio and raise the negative impact that could be depicted
from capital market. Hence, investment in the stock could be depicted to only 10% of the
portfolio, where the beta could be negative and reduced with adequate diversification. The
main reason behind the reduced investment is the stock is high beta, which increase risk from
investment. Valipour et al. (2015) mentioned that use of diversified portfolio could help in
reducing the risk from investment and adequately compensate for the high beta stocks.

4
MANAGING FINANCE
Reference:
Gagliardini, P. and Gouriéroux, C., 2013. Granularity adjustment for risk measures:
Systematic vs unsystematic risks. International Journal of Approximate Reasoning, 54(6),
pp.717-747.
Valipour, M., Amin, V., Kargosha, M. and Akbarpour, K., 2015. Forecasting stock
systematic risk using Heuristic Algorithms. Journal of productivity and development, 1(1),
pp.36-41.