Guidance on Financial Economics BUSI3106 coursework

Individual coursework

Deadline: 15:00, 5th December 2024

Submission: Online submission on the Moodle Please note:

. Late submission will receive penalty on awarded marks. No submission will receive a mark of zero.

. Only Coursework submitted on Moodle will be marked.

Choose a non-financial firm listed in the Chinese stock market and analyze its risk and return profile. The Capital Asset Pricing Model (CAPM) must be used for the analysis. Comment on whether you would recommend this stock to a Chinese investor in his mid-fifties who has most of assets in state-owned bank deposits in his asset portfolio.

1.  Structure

•  A brief introduction (on the selected company etc.) •  The CAPM, data, estimation results (needs to be accurate and precise) •  Other supporting evidence (this section is quite open)

o  As  the  CAPM  focuses  on  the  systematic  market  risk,  perhaps  the other supporting evidence would focus on 1) other systematic risk, nonsystematic risk, or no risk at all

o  It can cover the macro-economy, business cycle, industry, financial statements and ratios, the management team, and the list goes on

•  Recommendation

o  The Chinese investor is in his mid-30’s and who has only risk-free assets in his asset portfolio. Assumptions on his profile need to be reasonable,  e.g,  stable  income and job,  considerable savings for investment, etc.

2.  Data and estimation

•  Summarize the data (mean, standard deviation and etc.) •  Explain (in a few sentences) why you    choose the particular data frequency and sample period •  Explain  (in  a  few  sentences)  why  you choose  the  particular  stock  market index •  Discuss the regression results and their financial interpretation

3.  Miscellaneous issues

• a  well-written  essay  of  1200~1300  words would be just as nice

•  No need to provide many references, as the coursework is an application of the CAPM followed by your own analysis

•  Whether you recommend the stock or do not recommend the stock will not afect the grade

•  No need to append the data to the coursework

•  Any  tables  /  figures  must  be  nicely  formatted;  also  check  writing  and grammatical mistakes – there is a penalty for sloppy presentation and poor writing

Individual coursework Deadline: 15:00, 5th December 2024 Submission: Online submission on the Moodle

Late submission will receive penalty on awarded marks. No submission will receive a mark of zero. 2

Choose a non-financial  firm  listed  in  the  Chinese  stock  market  and  analyze  its  risk and return profile. The Capital  Asset Pricing Model (CAPM) must be used for the analysis. Comment  on whether you would recommend  this  stock to a Chinese  investor in his mid-fifties who has most of  assets  in state-owned  bank deposits in his asset portfolio.