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Part 1 requirements You are an analyst working for a major stock broking firm. Your boss has asked you to prepare a report on the risk and return characteristics of two S&P/NZX 50 Gross Index (^NZ50) companies. The S&P/NZX 50 Gross Index is designed to measure the performance of the 50 largest, eligible stocks listed on the Main Board (NZSX) of the NZX by floatadjusted market capitalization. The index is widely considered as New Zealand's preeminent benchmark index. The index is covering approximately 90% of New Zealand equity market capitalization (https://www.nzx.com/markets/nzsx/indices/NZ50). Get the components for ^NZ50 at https://nz.finance.yahoo.com/q/cp?s=%5ENZ50 Click on the company symbol then click on Historical Prices and Download data for individual stock prices. Resent 3year daily data is required to perform the calculations (Part one). You are expected to include the following contents in your calculations:

Calculate the historical daily returns of the two NZ50 companies (1 mark)

Obtain the summary statistics of the daily returns of the two NZ50 companies (1 mark)

Create Histogram for the two NZ50 companies (1 mark)

Convert the daily returns to annul returns for the two NZ50 companies (1 mark)

Perform a ttest to examine whether the mean of the two NZ50 companies daily returns are statistically different (2 mark)

Estimate portfolio returns and standard deviations based on varying proportions of the two NZ50 companies in the portfolio (2 mark)

Estimate the minimum variance portfolio (2 mark)

You need to match the sample to perform portfolio return and risk analyses, e.g., please exclude the trading dates that is only available for one of the two NZ50 companies. Part 2 requirements Your report will be delivered to clients of the firm who may have little knowledge of finance, so please interpret your results clearly. Please have a focus on the finance concepts rather than the statistical analyses. Your boss points out that although the past is not always a good predictor of the future, the clients may want to use the historical return and risk data when making buy and sell decisions.

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