25721 Commonwealth Bank of Australia Analysis Assignment Sample

Subject Code : 25721
University : University of Technology Sydney My Assignment Services is not sponsored or endorsed by this college or university.
Subject Name : Accounting and Finance

Investment Management

(a) It can be noted that stock prices and ASX 200 have fallen after January’20 and there is a significant fall in prices in March’2020. Although, stock prices have increased after Mar’20 but stock prices and ASX 200 is still significantly lower as compared to Jan’20 and Feb’20. Hence,it would not have been wise decision to trade on ASX since the start of 2020.

(b) Description of the Companies

Code	Name of the Company	ASX Industry group	Description & Products/Services
CBA	Commonwealth Bank of Australia	Banking	Commonwealth Bank of Australia is an Australian multinational bank. The main products of bank are Bank Accounts& Credit cards.
CSL	CSL Limited	Biotechnology	CSL Limited is global biotechnology company with headquarters in Melbourne, Australia. Two of its products are Biotherapies and Influenza vaccines
BHP	BHP Group Limited	Mining	It is a public listed company with headquarters in Melbourne, Australia. It deals in Petroleum &Technology
WES	Wesfarmers limited		It is an Australian conglomerate headquartered in Perth, Australia. Two of the products are Chemicals & Fertilizers
WOW	Woolworths Group	Retail	It is a major Australian company in Retail sectors. The main products are Fresh food, Financial services & Insurance
TLS	Telstra Corporation Ltd.	Telecommunications	It is an Australian Telecommunication company. The main products are Mobile Phones, Home Phones
WPL	Woodside Petroleum Ltd.	Petroleum exploration	It is a petroleum exploration and production company headquartered in Perth, Australia. It deals in Oil and gas production
GMG	Goodman Group	Commercial & Industrial property	It is a company in real estate sector with headquarters in Sydney, Australia. It deals in Property management & property development

Whether it would be best to buy or short sell each of the companies.

CBA- Prices have fallen since Jan’20 and then increased marginally in July’20. Hence it would be best to buy.

CSL-Prices have started falling after Jun’20. Hence it would be best to short sell.

BHP-Prices have fallen after Jan’20 and started to increase after May’20. Hence it would be best to buy.

WES- Prices have fallen after Jan’20 and started to increase after May’20. Hence it would be best to buy.

WOW- Prices have fallen after Jan’20 and started to increase after May’20. Hence it would be best to buy.

TLS- Prices have fallen after Jan’20 and started to increase after Jun’20. Hence it would be best to buy.

WPL- Price have fallen after Jan’20 and have increased in Apr’20 and have started declining from Jun’20. Hence it would be best to short sell.

GMG- Price have increased since Jun’20. Hence it would be best to buy.

(d) Please refer to excel sheet attached for calculation

Company	CBA	CSL	BHP	WES	WOW	TLS	WPL	GMG
Standard Deviation of monthly returns	5%	5%	7%	5%	5%	5%	7%	6%

(e) Please refer to excel sheet for calculation

Company	CBA	CSL	BHP	WES	WOW	TLS	WPL	GMG
Correlation between company’s monthly returns and ASX 200’s returns	0.75	0.38	0.62	0.70	0.51	0.44	0.76	0.64

(f) The four best companies to create portfolio would be CSL, WES, WOW & TLS as they have lower standard deviations and comparatively higher returns

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