10:46
o moodle.deakincollege.edu.au
.11 1.7.’ •
Part Three (20 Marks) TABLE 1 (below) includes price data on the ASX All Ordinaries Index, Galaxy Resources (GXY) and Australia and New Zealand Banking Group limited (ANZ) from years 2010 to 2020:
TABLE 1: (Source: https://au. inance.yahoo.com)

Galaxy Resources

Market Returns
GXY Returns
ANZ Retums
6146.50
3.8300
5937.30
2.1700
7121.20
0.9250
1. Complete Table 1 above by calculating the annual returns for the All Ordinaries Index, Galaxy Resources and ANZ in the first step and the expected retum and risk in the second step. The completed table should be submitted with your assignment. Please show your steps for: (5 marks)
o. the annual market returns for 2019 b. the expected return for ANZ c. the risk for GXY
2. The Beta coefficients of GXY and ANZ are 0.19 and 0.88 respectively. What does Beta measure and how Is it interpreted? Explain the beta values of GXY and ANZ by linking to the price data from Table 1.
(3 marks)
DEAKIN COLLEGE

3. 28-year-old Tony notes the recent surge in GXY share price, due to the expected shift to electric vehicles. He also likes the stability of ANZ. He tells you, his financial advisor, that ‘I would like to put all my money into GXY and ANZ, because I believe electric vehicles are the future, and that ANZ is too big to fail. There is no point leaving money in my savings account or other assets. I believe I will outperform the rnarket in the long run with these two shares.’ Do you agree with his statement? Why or why not? In your answer, you must discuss diversification, different components of risk, and reference the beta values from above. (6 marks, 400 words MA,
4. As his financial advisor, what would you recommend Tony to do differently? In your answer, please provide three specific investment options for Tony, with detailed justification for each. You should include references for these options (websites are acceptable). (6 marks, 400 words MA,
You are strongly advised to use Microsoft Excel for part (a) above. Please note: You DO NOT need to orint out or submit the excel sheet for your answer. However, you are required 10 XeeP a coPY your workings, which may be requested by your examiner at the time of marking. Failure to Pr.. the file if requested will result in a score of zero marks for this question.