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Company A- Gujarat Mineral Development Corporation Limited

Company B- Piramal Enterprises

PARTA Step 1: Take the TWO companies assigned and enter their monthly (end of month) stock prices from a publicly available database (in Columns A for date, B and C for prices for example) for the last 60 months. The sample period should end on March 31 2021. In case you have been allotted a company for which 5 years of data is not available, you need at least 36 months of data. If the company was listed after and you cannot get 36 months of data, please let me know so that I can allot a different company to you. Step 2: In (column F) determine the monthly return for each stock by using the form Return in Month t = In ( Pricet/ Pricet-1). IGNORE DIVIDENDS Step 3: Estimate the monthly mean return, variance and standard deviation of each stock. Step 4: Find the covariance and correlation of returns Step 5: Finding Efficient frontiers: We need to plot the means and standard deviations of various porttolio proportions. Formulas for the mean and standard deviation for the portfolio are already known to you Using weights from 0 to 1 at intervals of 0.005, you will get different combinations of the portfolio means and standard deviations and plot them to arrive at an EFFICENT FRONTIER of the portfolio combinations PART B: You have computed the EFFICIENT FRONTIER in PARTA based upon the true correlation coefficients. Now simulate efficient frontier for the same combination with hypothetical correlation coefficients of Of 1.0; +0.80 +0.60, +0.35.-0.25 -0.65.- 0.80, -1.0 and plot them. PART C: TAKE THE COMPANY LISTED AS COMPANY A IN THE ALLOTMENT SHEET AND COMPUTE ITS BETA.PLEASE SPECIFY THE MARKET INDEX AGAINST WHICH YOU ARE FLUITING YOUR CORRELATION. Do keep in mind that the data period and frequency of the index must be identical with the data set you have already used in computing the efficient trontier. PART D : FIND THE WACC OF COMPANYA

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