Masters of Accounting and International Finance †Free Samples

Question: Discuss about the Masters of Accounting and International Finance. Answer: Analysing the Companies and Market used in the portfolio SP ASX 200 the Market Index: Currently SP ASX 200 Has provided a return of 15.07% on 52 weak bases, with a 3.96% change on year to date basis. This mainly be indicates that SP ASX 200 is obtaining higher highs on each fiscal year.The current 52 week high of SP ASX 200 is mainly at 5950.10 with a 52 week low of 5051.00 (Bloomberg.com 2017). The difference in overall low and high mainly indicates the gains that are obtained by SP ASX 200 on the fiscal year. Thus, it could be understood that the increment value of SP ASX 200 could mainly allow investors to increase the return from investment. Agl Energy Ltd (AGL AT Equity): Agl Energy Ltd with a current 52 week high of 28.47 and 52-week low of 16.50 indicates a relatively growing company. The current pricing of Agl Energy Ltd is mainly at 22.70, which is a relatively close to the 52-week high of the company. Furthermore, the PE ratio of the company is mainly at 51.03 with an YTD change of 25.4% and 5-year growth of 6.17% (Bloomberg.com 2017). This relevant increment in stock price is comprised with a beta of 0.74, which indicates the overall risk of investment. Thus, it could be understood that Agl Energy Ltd is an adequate investment option, which could be used by investors to increase the overall return from investment. BHP Billiton Ltd (BHP AT Equity): The current pricing of BHP Billiton is mainly at 24.31, which is a relatively close to the 52-week high of the company. In addition, BHP Billiton has a 52-week high of 27.95 and 52-week low of 17.29, which mainly depicts the relevant growth attained by the company in the fiscal year (Bloomberg.com 2017). Moreover, PE ratio of BHP Billiton is mainly at 39.36 with a 5-year growth of -6.99% and YTD change of -2.99%. The beta mainly comprises of 1.57, which indicates the overall risk of investment. The relevant increment in risk and reduced group of the stock mainly indicates the high risk in investing in BHP Billiton stocks. Commonwealth Bank of Australia (CBA AT Equity): The Commonwealth Bank of Australia currently has a PE ratio of 15.57 with a YTD change of 4.66% and 5 year growth of 5.4%. Commonwealth Bank with a current 52-week high of 86.68 and 52-week low of 69.22 indicates a relatively growth attained by the company. Commonwealth Bank is currently priced at 22.70, which is a relatively close to the 52-week high of the company. Commonwealth Bank currently trades at the value of 86.25, which is relatively close to the 52-week high and depicts the relevant growth attained by the company in fiscal year (Bloomberg.com 2017). Furthermore, beta of stock is mainly at 1.13, which indicates the overall risk of investment. Therefore, the overall return and risk capacity of Commonwealth Bank of Australia is viable, which could eventually help investors in generating higher revenue from investment. CSL Ltd (CSL AT Equity): CSL Ltd currently trades at the value of 86.25, which is relatively close to the 52-week high and depicts the relevant growth attained by the company in fiscal year. The CSL Ltd currently has a PE ratio of 33.33 with a YTD change of 27.46% and 5 year growth of 16.71%. CSL Ltd with a current 52-week high of 129.70 and 52-week low of 91.62 indicates a strong trend attained by the company (Bloomberg.com 2017). Furthermore, beta of stock is mainly at 0.70, which indicates the overall risk of investment. Therefore, the overall return and risk capacity of CSL Ltd is viable, which portrays an effective investment opportunity. The growth in returning and YTD eventually helps in identifying the relevant financial condition of the company, which would allow investors to make adequate decisions. Fortescue Metals Group Ltd (FMG AT Equit)y: Fortescue Metals Group Ltd currently trades at the value of 5.50 and depicts the relevant growth attained by the company in fiscal year. The Fortescue Metals Group Ltd currently has a PE ratio of 6.86 with an YTD change of -6.62% and 5 year growth of 31.95%. CSL Ltd with a current 52-week high of 7.27 and 52-week low of 2.81 indicates a strong trend attained by the company (Bloomberg.com 2017). Furthermore, beta of stock is mainly at 1.61, which indicates the overall risk of investment. Therefore, the overall return and risk capacity of Fortescue Metals Group Ltd is not viable, as compared overall risk is relevant higher and no adequate returns provided to the investors. The growth in returning and YTD eventually helps in identifying the relevant financial condition of the company, Transurban Group (TCL AT Equity): The current pricing of Transurban Group is at 11.97, where the YTD change is at 15.99% with a 52-week high of 12.655 and 52-week low of 9.45. Furthermore, the company's beta as compared to the index is at 0.56. The Transurban Group current PE ratio is under 190.44, with a 5-year net growth has of 11.35% from the evaluation (Bloomberg.com 2017). Therefore, the overall return and risk capacity of Transurban Group is viable, as compared overall risk has relevant returns provided to the investors. Telstra Corp Ltd (TLS AT Equity): The PE ratio of Telstra Corp Ltd is at 14.56 with a 5-year net growth of 2.06% identified from the Bloomberg price quote (Bloomberg.com 2017). The company overall current share price is within the confinements of the 52-week low, which indicates that price of the company is relatively falling. The spot price of Telstra Corp Ltd is at 4.16 with an YTD change of -18.43%, where the current 52-week low at 4.15 and 52-week high is at 5.86. Moreover, the beta is at 0.69, which states the risk involved with investment. Therefore, after seeing the overall return from the company, it is advisable for investors to evaluate the current scenario and invest according to their risk capacity. Westfield Corp (WFD AT Equity): The spot price of Westfield Corp is at 9.32 and YTD change of -0.64%, with its x 52-week low at 8.21 and 52-week high is at 11.14 (Bloomberg.com 2017). The PE ratio of Westfield Corp is at 10.73 with its 5-year net growth at -7.54%, which depicts the relevant decline in financial stability of the company. In addition, the company's beta is actually at 0.71, which states the reduced volatility that might be faced by the company from capital market. Seeing all the relevant growth and price structure of the company it is not advisable to invest in it without adequate research. Woolworths Ltd (WOW AT Equity): The share price of Woolworths Ltd is at 26.47, with YTD changes of 9.83%, where its 52-week low at 20.30 and 52-week high is at 26.98 (Bloomberg.com 2017). The PE ratio of the company is at 18.57 and 5-year net growth is at -11.58%, which depicts the reduced valuation. Moreover, the company's beta is at 1.02, which depicts ability to reduce the overall risk from investment. Therefore, investment in the overall company could eventually increase risk from investment and hamper profitability of the investors. Woodside Petroleum Ltd (WPL AT Equity): The Woodside Petroleum Ltd PE ratio is 24.16 with a 5-year net growth of 1.14%, which depicts relevant growth opportunity of the company. The spot price of Woodside Petroleum Ltd is at 33.15, with an YTD change at 6.39%, where its 52-week low at 24.98 and 52-week high is at 33.97 (Bloomberg.com 2017). The company's beta is actually at 1.11, which depicts risk involved from investment. Seeing the return investors could investment in the company according to their risk appetite. Correlation among ten stocks and Market Index with stocks: The evaluation of the correlation table mainly depicts the positive relation between returns of index and other 10 companies included in the portfolio. This positive correlation mainly allows the investors to understand that with an increment in the index portfolio might also grow, raising the overall profits from investment. Avdjiev, McCauley and Shin (2016) argued that use of correlation mainly allows investors to detect stocks, which could be used for hedging purposes. From appendix 1, overall correlation could be understood between all the stocks and index. Furthermore, there is positive correlation, which is identified between the 10 stocks and index, which could help the investor adequately gain income from the index momentum. Brooks (2014) stated that correlation table during an economic crisis loses its fiction and must not be used until adequate growth could be witnessed. Portfolio Analysis: Portraying valuation of Treynor and Sharpe ratios from 13 April 2012 of 10 stocks The evaluation of equally weighted portfolio that is depicted appendix 2 mainly portrays the return of 59.9%. The portfolio consists of the 500 million, which is equally distributed among all the relevant 10 stocks used in the portfolio. The derivation of equally weighted portfolio mainly helps in understanding the relevant risk and return that might be provided from investment. The beta of the Portfolio was near 0.97, which indicates the high risk involved in investment. Thus, a decline in this capital market index could hamper overall portfolio returns and reduce investment capital. Furthermore, the portfolio mainly has a Treynor ratio of a 0.59 miler Sharpe ratio of 2.47 this depicts the consistency in providing returns of the companies enlisted in the portfolio. In this context, Chen, Ng and Tsang (2014) mentioned that use of adequate portfolio allows investors to detect relevant investment opportunities by reducing the walrus from investment. On the other hand, Damodaran (2016) argued that without adequate research formation of portfolio could result in a high risk and low return, which might in turn help of investment capital of the investor. Moreover, the evaluation of equally weighted portfolio mainly depicts that it is not adequate as the risk from investment is relatively high. Thus, the return and risk from the Portfolio could eventually hamper investor's ability to sustain its momentum in the market. Depicting on the performance of different portfolios and stating its performance measures: There are relevantly 21 portfolios portfolio weights, which is derived from the calculation. These 21 portfolios consists of returns from 1%, 2%, 3%, 4%, 5%, 6%, 7%, 8%, 9%, 10%, 11%, 12%, 13%, 14%, 15%, 16%, 17%, 18%, 20% and 25%. The portfolio which consisting of the above returns are mainly depicted in appendix 3. From appendix 3, the overall efficiency of the portfolios with relative risk is identified with could help investors in meeting at a good investment decisions. These different portfolios mainly comprise of different risks, which is involved in the Investment that might be conducted by the investor. The determination of different stocks with different weights mainly allow investors to identify the most optimal risk attribute which they want to follow for gathering the required rate of return. Guerard, Markowitz and Xu (2015) stated that use of efficient Frontier Mini allows investors to detect the viable investment option which has the minimum risk and maximum return. On the other hand, Gilpin (2016) argued that portfolio mainly loses its friction if wrong valuation is conducted and no hedging strategies are used for reducing any kind of risk from investment. From the overall evaluation of appendix 3, there is no convergence identified, which could hamper the overall profitability of the investment. In addition, the use of adequate calculations allowed in detecting, the risk involved in each of the returns defected about. The relative decline of risk was witnessed where from the return of 1% to 11% where is declined from 18.5% to 11.48%. However, after returns from 12% the risk mainly increased, as the return increased where risk of 11.46% could be seen for return of 13% and a risk of 13.38% could be seen for return of 20%. This relevant increment in risk and return indicates that rising income is supported by e more risk that needs to be faced by investors. According to Lee and Dai (2017), use of adequate investment portfolio could eventually help investors in reducing the risk involved in investment and maintain a continuous return generating portfolio. Furthermore, relevant analysis is conducted based on Sharpe ratio, Treynor ratio, Portfolio beta, risks and return. This evaluation many help in understanding the overall impact of the portfolio construction and how it would help investors in improving the return. Whereas, the Sharpe ratio and Treynor ratio is increasing from 1% return to 25% return. However, the beta of the portfolios also decreases from 1% to 25%. This mainly suggests that use of adequate portfolio could eventually help investors in gaining higher return with investing a low risk in their portfolio. From the overall evaluation, it could be understood that use of adequate portfolio creation mainly allows investors to reduce the risk and increase return from the investment. In addition, the portfolio creation also allows investors to minimize risk and increase return level that they need to achieve during the overall investment period. Rutkauskas, Stasytyte and Borisova (2015) mentioned that use of adequate portfolio allows investors to obtain a constant gain from investment. Commenting on the general global minimum variance portfolio and efficient frontier: The evaluation of appendix 4, mainly depicts the Global minimum variance portfolio that could be used by the investor for increasing the overall return. In addition, the overall portfolio return of 12% is identified, as the most viable option, which could increase return from investment. The minimum variance portfolio derived from the calculation mainly provides relevant return of 82.28% from the tenure of 5 years. The overall portfolio beta is derived at 0.173, which is relatively below with the overall beta of equally weighted portfolio.This only indicates that the minimum variance portfolio has a higher return than the equal weighted portfolio, which in turn could help investor increase overall return from investment. Furthermore, the portfolio only comprises of 9 stocks where the FMG at equity is mainly ignored due to the high risk involved in its investment. The minimum variance portfolio mainly chooses stock, which have the least risk and provide a constant income.This derivati on of constant in company allows investors to maintain a level of cash inflow, which might support its future endeavours. Spronk, Steuer and Zopounidis (2016) mentioned that use of adequate portfolio investors to create wealth and increase the current capital investment structure. References: Aouni, B., Colapinto, C. and La Torre, D., 2014. 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