Investment Analysis and Portfolio Management Assessment

Task:

1. You work for an investment fund. Given the post-pandemic environment, the client wants your advice as to what shares to invest in, at the moment, and from which industry. You may procure the required information for shares from any AUSTRALIAN finance
   • Discuss the background of each of the 3 companies briefly and various share features such as average volume, previous close, current share price, dividends given, price to earnings ratio, etc.
   • Check the beta for your 3 selected shares and calculate the expected return for each share using the CAPM method, given the S&P 500 index return to be 13.6% and the yield on a 10Y Government Bond to be 1.3430%. Also, calculate the Holding Period Return for each of your 3 years assuming a one-year investment considering you bought the shares one year ago and want to sell it now.
   • Is the HPR in line with the Expected Return calculated in part (ii) above? Comment and discuss. Based on your research and calculations above, advise your client, on which shares they must invest in, giving appropriate reasons.
2. Your manager is also interested in raising funds from the capital market and wants information regarding Hybrid Securities. He wants to know if raising finance through hybrid securities works best for companies. Discuss and advise him as to the pros and cons of this method of fundraising and help him decide if he should proceed with issuing Hybrid Securities. You could also apply knowledge of behavioral finance to identify typical behavior patterns exhibited by investors and how this could affect the fundraising for the company. Use basic financial knowledge, skills, and principles to make justifiable business and investment decisions.