London School of Commerce
MODULE TITLE: - FINANCIAL MARKETS AND INVESTMENT ANALYSIS
PROGRAMME: MBA
SEMESTER: 3
ACADEMIC YEAR PERIOD: June-September 2014 Semester
LECTURER SETTING ASSESSMENT: - Dr K V Shenai
DATE ASSESSMENT SET AND LOADED ON TO STUDENT PORTAL: DATE ASSESSMENT TO BE COMPLETED AND SUBMITTTED: SUBMISSION METHOD/MODE: - Online via turnitin
---------------------------------------------------------------------------------------------------------------Assessment Type: Individual coursework worth 100 % of the module
Assignment Question:
You will be given a company on the main London Stock Exchange. Discuss briefly the nature
of activities of the company and its position in relation to the sector in an opening introductory
page.
(a) Using weekly data of 2012, estimate the market model for the share of the company and
its sector index and interpret the outputs of these regressions. (The sector index proxies as a
portfolio.)
(40 marks)
(b) Explain what is meant by ‘equity market risk premium,’ and arrive at an estimate for the
UK market from data available on the internet, quoting your sources.
(15 marks)
(c) Using the information from (a), (b) above, estimate the return that your company and the
sector index were expected to generate for 2013 using the yield curve and the Capital Asset
Pricing Model.
(10 marks)
(d) Compare the actual return of the share and the index with the expected returns from the
CAPM and with reference to academic literature, critically discuss your findings, and the
usefulness of the concepts of market efficiency, portfolio theory and the CAPM.
(30 marks)
Good clear presentation, referencing, spelling and grammar.
(5 marks)
Your individual assignment:
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Gives you an opportunity to apply much of the learning from the module to your
chosen company.
Assessment requirements:
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The submission of your work should be organized and clearly structured.
The overall word limit is 2,000 words: this is about 8 A4 pages (size 12, times
new roman, 1.5 line spacing). The appendices will include a reference list and
the weekly data on prices of the share the sector and the entire market. The
word count must appear on the top right hand corner of page 1 of your
assignment. The pages must be numbered in the bottom right hand corner. You
name can appear in the assignment at the footer.
Indicate the sources of information and literature review by including all the
necessary citations and references adopting the Harvard Referencing system.
Please note that this is an individual assignment and the policy of the University
on Plagiarism and Academic Misconduct applies.
Students who have been found to have committed acts of Plagiarism are
automatically considered to have failed the entire module.
Plagiarism involves taking someone else’s words, thoughts, ideas or essays from
online essay banks and trying to pass them off as your own. It is a form of
cheating which is taken very seriously.
Marks will be deducted for poor presentation and inadequate referencing.
All workings must be shown.
Assignment Structure:
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Introduction.
The context of your chosen listed company.
Attempts at parts (a), (b) and (c)
with reference to academic literature, critical discussion of your findings in (a), (b) and
(c) and the usefulness of the concepts of market efficiency, portfolio theory and the
CAPM.
References and bibliography
Appendix – The appendices will include a reference list and the weekly data on
prices of the share, the sector index and the entire market.
Module learning outcome: Upon successful completion of this module students will be able to:
Critically understand interest rates, the efficient market hypothesis, portfolio theory,
the usefulness of asset pricing models and appreciate the factors which need to be
considered when taking decisions on these matters.
Marking scheme: June 14, CMET FMIA assignment
Part
Marks
awarded/
allocated
(a) good write up on company and its
position in the sector; proper
---/40
interpretation of the F statistic, R^2 ,
alpha, beta, p values on the market model
regressions
(b) equity market risk premium,
properly researched, referenced
----/15
----/10
(c) computation of return of company
and sector from CAPM, using rf, beta amd
equity market risk premium.
(d) comparison of actual return of share
and sector with estimates from the CAPM
and critical discussion on the concepts of
efficient markets, portfolio theory and
CAPM, with suitable academic referencing.
----/30
----/5
(f) good clear presentation, referencing,
spelling and grammar.
Total
Drshenai/june 2014
----/100
Marker Comments