Assessment item 3
Case Study
Value: 20%
Due date: 06-May-2015
Return date: 27-May-2015
Submission method options
Hand delivery (option applies to Internal only)
Alternative submission method
Task
You are an investment advisor. Based on your own market research on AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED and BHP BILLITON LIMITED, you are required to recommend to your customer which of the companies’ ordinary shares is better value for money? In your recommendation, include all the calculations and market information on which your recommendation is based. You may also include the assumptions which you made about your customer’s financial situation when recommending purchase of the below company’s shares i.e. short and long term goals etc.
For this question use the Yahoo! Finance website at http://au.finance.yahoo.com/ and other websites for data.

Calculate the following to help you come up with a recommendation as a minimum:

• Find the monthly holding period returns (%) for the period 1 October 2013 – 30 September 2014 for AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED, BHP BILLITON LIMITED and the market proxied by the All Ordinaries index. The monthly holding period return is the percentage return (%) you would receive if you bought an asset on the first day of the month (opening price) and sold it on the last day of the month (closing price). Graph your results on one graph with returns on the Y axis and time on the X axis. (Use 'Close' rather than 'Adjusted Close' for the selling price and ignore any dividends.)

• Calculate the required rate of return on ordinary shares of the above two companies.

• Calculate ordinary share valuation – single holding period for both the above companies.

Note: Headings in the marking rubric needs to be addressed.

Rationale
This case study is provided as an opportunity to apply the concepts in an authentic scenario that you may encounter in the workplace. It is also an opportunity to practice and get feedback on your mastery of skills and concepts that are formally assessed on the final exam.
Marking criteria
Problem types/criteria
Fail
(FL)
0% to 49%

Pass
(PS)
50% to 64%

Credit
(CR)
65% to 74%
Distinction
(DI)
75% to 84%

High Distinction
(HD)
85% to 100%

Quantitative problems FL PS CR DI HD
Share recommendation report applies principles of finance correctly to quantitative analysis. Types of quantitative analysis required are valuation of shares, expected rate of return & price-earnings ratio. Frequent errors or unacceptable mistakes indicative of a lack of understanding of core principle(s). Applies understanding of relevant principles, shows workings but contains some major errors. Applies correct principles and calculations, substantiated with workings or diagrams in order to arrive at the right answer, shows workings but contains some minor errors. Applies correct principles and calculations, substantiated with workings or diagrams in order to arrive at the right answer, shows workings but contains few minor errors. Applies correct principles and calculations, substantiated with workings or diagrams in order to arrive at the right answer. There are negligible errors/no errors in calculations.
Conceptual problems FL PS CR DI HD
Share recommendation report applies principles of finance correctly in discussing recommendations. Discussion reflects lack of basic understanding of relevant principles. Discussion reflects basic understanding, but not deep understanding of relevant principles. Discussion reflects good understanding of relevant principles. Discussion reflects excellent understanding of relevant principles. Principles are applied in the appropriate manner to arrive at the correct answer. The use of relevant principles shows creativity and imagination.
Financial technology FL PS CR DI HD
Share recommendation report uses appropriate financial technology to gather information and conduct financial analysis. Spreadsheet, data sources, and/or financial software is misused or used inappropriately. Spreadsheet, data sources, and/or financial software used competently. Mostly correct results are derived using relevant technology, but there may be some major errors. Spreadsheet, data sources, and/or financial software used competently. Mostly correct results are derived using relevant technology, but there may be some minor errors. Spreadsheet, data sources, and/or financial software used competently. Mostly correct results are derived using relevant technology, but there may be few minor errors. Spreadsheet, data sources, and/or financial software used masterfully. The correct answers are derived using relevant technology, and the results are presented in a clear and professional manner.
Analyse business situations FL PS CR DI HD
Analysis is sufficient to reach reasonable conclusions and recommendations about the purchase of shares. Quantitative and qualitative analysis too simplistic or convoluted. Quantitative and qualitative analysis is adequate to make reasonable conclusions and/or recommendations. Quantitative and qualitative analysis is good to make reasonable conclusions and/or recommendations. Quantitative and qualitative analysis is strong to make reasonable conclusions and/or recommendations. Quantitative and qualitative analysis persuasively supports the recommendations and conclusions.
Financial research FL PS CR DI HD
Use of literature/market research/evidence of reading. No evidence of literature/market research or irrelevant to the research question Literature/market research is presented uncritically, in a descriptive way and indicates some limitations of understanding. Literature/market research is presented with some criticisms, in a descriptive way and indicates few limitations of understanding. Literature/market research is presented with good criticisms, in a descriptive way and indicates good understanding. Has developed and justified own ideas based on a wide range of sources which have been thoroughly analysed, applied and discussed.

Requirements
Assignments should be submitted through Turnitin as well as hard copy at reception. Turnitin submissions are due by midnight (AEST) of the date specified.