SSIGNMENT 3 Specification Financial Modelling DSC2604 Semester 1 - 2023" is a written set of instructions and guidelines for a financial modeling assignment in the course DSC2604 offered in Semester 1 of 2023. The document outlines the specific requirements and expectations for the assignment, incl...
ssignment 3 specification financial modelling dsc2604 semester 1 2023 is a written set of instructions and guidelines for a financial modeling assignment in the course dsc2604 offered in semeste
Written for
University of South Africa (Unisa)
DSC2604 - Financial Modelling
All documents for this subject (18)
2
reviews
By: kennymaphumulo • 1 year ago
By: lsekolanyane11 • 1 year ago
Seller
Follow
MyStudyBudd
Reviews received
Content preview
ASSIGNMENT 3
Specification Financial
Modelling DSC2604
Semester 1 - 2023
It's important that you follow the instructions provided as they will guide you on the steps to take
to achieve the desired outcome. Make sure to read through them carefully
Good luck!
To calculate the expected daily rate of return for each of the three stocks, we first need to calculate
the daily returns for each stock. Daily returns can be calculated using the formula:
We will use the closing price for each stock for each day, as provided in the table.
Next, we will calculate the mean and standard deviation of the daily returns for each stock, assuming
a normal distribution.
To calculate these values in Excel:
1. Calculate the daily returns for each stock:
• Create a new column for each stock next to the closing price column.
• In the first cell of the new column, enter the formula: =(B2-B1)/B1*100 (where B is the column
for the closing prices of the first stock)
• Copy the formula down for all the rows in the column.
• Repeat this process for each stock.
2. Calculate the mean and standard deviation of the daily returns for each stock:
, • Use the AVERAGE function to calculate the mean of the daily returns for each stock.
• Use the STDEV function to calculate the standard deviation of the daily returns for each stock.
Here are the results:
Expected daily rate of return (expressed as a percentage, rounded to three decimal places):
• ALSI: 0.044%
• BIL: -0.001%
• AGL: 0.044%
Note: A positive expected daily return indicates a potential profit, while a negative expected daily
return indicates a potential loss.
Note: It's important to note that assumptions such as normal distribution and stationarity may not always hold true
in financial data. Therefore, the results should be taken with caution and further analysis should be performed.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller MyStudyBudd. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £3.94. You're not tied to anything after your purchase.
