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BEA652 Assignment Guidelines & Questions_2020.doc
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3 Assignments 3.1 Assignment 1 Questions (5 marks)
Answer the following:
(a) Calculate the weekly arithmetic (discrete) and geometric (continuously compounded) returns for each of the three assigned stocks and the S&P/ASX 200 (^AXJO) for the past 52 weeks (allowing for dividend payments and capital structure changes, if any, in your calculations). Tabulate and graph both the returns. The compute the arithmetic and geometric average returns for the same.
[2 marks]
(b) Calculate the price-weighted, the value-weighted and equally weighted aggregate return series using the three pre-assigned stocks you have chosen. Examine and compare the pattern of the index returns of your three weighted aggregate series with those of the three stocks (highlighting the sample returns and variances). Which weighting scheme do you prefer and why?
Supplement all your answers with tables and graphs/ charts.