The following assignment is based on a simplistic view of the share market. Advice from financial planners and share market experts strongly recommend that all relevant information be taken into account before such financial decisions are made and state that there may be risks involved with any investment opportunity.
Task 1: (RS)
In relation to the Share Market, define the following terms:
Price-earning (PE) ratio
Earnings per share
Using data from the paper or the internet collect information on 3 industry & 3 mining companies. Websites you might find useful include: www.asx.com.au, www.tradingroom.com.au. Compare and contrast the companies by using a table. Include the following information in your table.
a) Name of company. (RS)
b) What the company does/makes/sells. (RS)
c) Share price variations over the last 6 months. (NRS)
d) Did the company make a profit or loss for the last financial year? (RC)
e) List any significant events/changes that have occurred over the last 12 months that may have affected share prices. (RC)
NOTES: (1) Reference all information sources.
(2) You must choose companies that are different to other students in your class.
Complete FORM 1 (the transaction form provided) to show all necessary details on the initial purchase of shares.
You must spend approximately $45 000 to $47 000 to allow enough money for brokerage to be paid from the $50 000 allocated to you.
This form must be completed and handed in to your teacher by end of lesson Wednesday 7th August.
Justify mathematically the reason for the selection of the company’s shares that were purchased. Your information should relate back to the information gathered in Task 2, including the reason for the particular mix of companies.
Set up a spreadsheet or table to record the 4pm close (‘PDC’ if using www.asx.com.au ) for each company in which you have invested on a regular basis (at least 5 times) for the duration of the investment period. (RS)
You will be selling all shares that you purchased on Monday 12th August.
For each company:
a) Complete transaction FORM 2 (provided on the attached sheet) to show all necessary details on the selling of shares. Calculate the total amount received for the final transaction (i.e. your shares minus brokerage, use online brokerage) (RS)
b) Calculate the $profit/loss per share for each of your companies. (NRS)
c) Convert your $profit/loss into a %profit/loss per share for each company. (NRS)
Determine the best 3 performing companies.
a) Using the 4pm close data from the spreadsheet in Task 5, prepare a graph to illustrate share prices over time for the best 3 companies. (RC)
b) Describe the trends and patterns that appear on your graphs. (RC)