Parts A and B of this assignment MUST be completed on an Excel Spreadsheet.
Part A:
The use of an accurate Excel (for Windows) model:
1. The setting and presentation.
- an input section which contains all variables crucial to the analysis.
- an appropriately designed output section.
- Efficient use of the spreadsheet functions and facilities: formulas, cell names, documentation, all variables in "input" section, etc.
2. Accuracy of calculations and Analysis.
Part B:
|
State
of
Economy
|
Measure
of
Probability
|
Market
Return
|
Asset
A
|
Asset
B
|
Asset
C
|
Asset
D
|
Asset
E
|
Asset
F
|
|
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
%
|
|
Worst
|
0.100
|
0.05
|
0.02
|
-0.01
|
0.03
|
0.04
|
0.06
|
0.01
|
|
Bad
|
0.200
|
0.08
|
0.06
|
0.02
|
0.08
|
0.05
|
0.08
|
0.04
|
|
Fair
|
0.300
|
0.12
|
0.07
|
0.05
|
0.12
|
0.1
|
0.16
|
0.07
|
|
Good
|
0.250
|
0.15
|
0.08
|
0.06
|
0.16
|
0.15
|
0.18
|
0.1
|
|
Best
|
0.150
|
0.17
|
0.1
|
0.12
|
0.17
|
0.16
|
0.2
|
0.12
|
a) Calculate for each asset whether it provides an excess return. You will need to determine firstly its expected value and then compare it to its estimated CAPM figure.
b) Summarise the risky asset's risk return profile (also calculate for each asset its Coefficient of Variation)