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Finance Assessment Task

1. Examine the various quantitative techniques used to describe, estimate and evaluate data 
2. Evaluate the strengths and limitations of statistical analysis techniques in finance
3. Apply quantitative techniques to describe financial data and test claims of performance 
4. Analyse the factors that influence the risk and return of asset classes and financial securities 
5. Assess statistical models used in estimating the value of financial assets and constructing efficient portfolios


You have been provided a sample of historical price level of the following shares and index at the end of each month from June 2007 to June 2017 (‘Section A Monthly Price's Index’ tab) in order to run a number of statistical analysis techniques.
Qantas Airways Limited (QAN)
Telstra Corporation Limited (TLS)
Westpac Banking Corporation (WBC)
Question 1
LO1: Examine the various quantitative techniques used to describe, estimate and evaluate data.
LO2: Evaluate the strengths and limitations of statistical analysis techniques in finance.
(a) Using the historical price level of the QAN, TLS and WBC shares and AORD index available in the tab ‘Section A Monthly Price&Index’, calculate the monthly rate of returns (%) of these shares and index to two (2) decimal places in the tab ‘Section A_Q1’. From your Excel results, paste a copy of the monthly returns for the shares and index for the months of July 2007 and June 2017 only in the answer section of your Word document.

Question 2
LO1: Examine the various quantitative techniques used to describe, estimate and evaluate data.
LO2: Evaluate the strengths and limitations of statistical analysis techniques in finance.
LO3: Apply quantitative techniques to describe financial data and test claims of performance.
(a) Set up a hypothesis test at 5% significance level to determine whether QAN’s mean return is significantly different from zero. Show all your workings in the Word document.
(i) What are the null and alternative hypothesis for this test?
(ii) Explain the risks associated with Type I and Type II errors in this context.
(iii) What type of test and distribution would you recommend for this test? Provide reasons for your recommendation.
(iv) Based on your recommendation above, determine the appropriate critical value and test
statistic for the hypothesis testing at 5% significance level.
(v) What is your conclusion for this hypothesis test?
(b) Set up the null hypothesis and alternative hypothesis to determine whether TLS’s monthly return is significantly different from WBC’s monthly return.
(i) What are the null and alternative hypothesis for this test? (1 mark)
(ii) By Using Excel’s paired t-Test (see tab Section A_Q2), find the critical value and test statistic for the hypothesis testing at 5% significance level.
(iii) What is your conclusion for this hypothesis test?

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  • Uploaded By : Keith
  • Posted on : October 19th, 2018
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