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Finance Assignment Question
As a research officer you have been asked to summarise, analyse and interpret the data. Specific tasks include the following:
Analysis of the weekly BHP closing prices
Analysis of the general distribution of returns
Analysis of the relationship, if any, between BHP and the All Ordinaries index returns
Finance Assignment Solution
Introduction
For analysis, data used was secondary data. The secondary data was collected from Yahoo Finance. The closing share price of BHP Billiton was used for this study. BHP Billiton is a listed company on the Australian Stock Exchange (Mann, Perm, 2013). The dataset consists of weekly closing share prices of BHP from the period 11/1/1999 to 31/12/2012. The dataset contains following information such as week ending, BHP closing price, all ordinaries index, BHP return, all ordinaries return.
Descriptive statistics
Mean | 0.003566 |
Standard Error | 0.00161 |
Median | 0.005891 |
Standard Deviation | 0.04349 |
Sample Variance | 0.001891 |
Kurtosis | 11.69972 |
Skewness | 1.047946 |
Range | 0.58598 |
Minimum | -0.17045 |
Maximum | 0.415525 |
The average return on BHP was 0.003566. The standard error of the mean for BHP return was 0.00161. The observation the split the BHP return distribution in two equal half was 0.005891. The standard deviation for BHP return was 0.04349. The square of the standard deviation for BHP return was 0.001891. The distribution of BHP return was peakedness distribution as compared to a normal distribution; Kurtosis was 11.699. As the kurtosis value of BHP return falls under the interval [-0.5,+0.5], so it is considered that data have normal peakedness distribution. The positive value of 1.0476 for the sample research represents that the distribution of BHP return is positively skewed (Dodge, 2008). The positive skew represents that the extension of the longer tail is toward the high values in the distribution. The range for BHP return can be calculated by subtracting the minimum value from the maximum value, which produces a range value equal to 0.58598. The lowest value of BHP return was -0.17045. The highest value of BHP return was 0.415525……………
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