Group Research Project Essay Example | Topics and Well Written Essays - 1500 words

Group Research Project - Essay ExampleJack Treynor introduced the concept of the capital summation pricing model to build on diversification and new portfolio theory introduced by Harry Markowitz (Levy, 2011). upper-case letter asset pricing model is simple to use this has made it possible to retain popularity despite the modern approaches to asset pricing and portfolio selection. This financial project aims at analyzing a given equally weighted portfolio, which constitutes quintette types of stocks listed in the Australian Stock Exchange. The project will measure the rate of deteriorate on securities of Woolside Petroleum, Santos, vegetable oil look to, Aurora Oil & squander and Beach Petroleum. The systematic risk will be determined utilise Beta as the basis of measurement. The project will also evaluate the performance of the selected stock use the capital asset pricing model. The result from the analysis is beneficial to both current and prospective investors when devi sing investment decisions. The analysis will also enable investors to decide whether to add their investment assets to the existing portfolio by finding non-diversifiable risk in the investments. The project will consider thirty-six observations consisting of monthly rates of return between January 2010 and December 2012. This will act as a representative sample for estimating the risks involved in each class of stock. Prior to estimating the capital asset pricing for the selected portfolio, the model will be time-tested for each stock. The Background of Companies Woodside Petroleum Woodside Petroleum Limited explores and produces petroleum in Australia (Roth, 2011). Woodside is Australias largest independent and consecrate oil and gas company with headquarters in Perth, Western Australia. The company is listed on the Australian Securities Exchange. Woodside focuses on the exploration, assessment, development, processing and supplying relative products and services. Santos Limited Santos limited produces and supplies oil and gas to its Australian and Asian customers. The communication channel of Santos is traced back to Cooper Basin since the year 1964 (Roth, 2011). The company is one of the largest suppliers of oil and gas to the domestic and outside(prenominal) markets. Presently, Santos has an exploration-led Asian portfolio focusing on three countries including Papua untried Guinea, Indonesia and Vietnam. Santos focuses on explorations, exploiting, processing, transportation and marketing of hydrocarbons. The company has everywhere 3,000 employees in Australia and Asia. The foundations of Santos are based on sustainable operations and collaborating with host communities, business partners and stockholders. Oil Search Limited Oil Search Limited is Papua New Guineas largest oil and gas producer, which was collective in the year 1929. The company has a 29% interest in the world scale Papua New Guinea (PNG) LNG project (Roth, 2011). Oil Search Limited i s a public listed company on the way Moresby and Australian stock exchanges. The Independent State of Papua New Guinea holds 15% of the companys interest, and this is the largest shareholder in the company. Oil Search Limited has launched exploration activities in Papua New Guinea, Kurdistan, Tunisia and Yemen. Aurora Oil & Gas Aurora Oil & Gas Limited, founded in 2005, is an Australia based oil and gas exploration and production