You have received your first commission as a financial analyst and decided that it is time to invest some of your own savings into the share market. Given your expertise, you consider investing despite the current unsettling market conditions, as you believe that the Australian market in undervalued. You have short-listed two companies (i) Rio Tinto (ASX code: RIO) and (II) Wesfarmers (ASX code: WES). Source current beta values for these two companies and describe why beta values are particularly relevant for your investment decision. Imagine that you believe the market will recover by 10% next year. Which investment would be preferable?
Obtain recent newspaper articles (the Australian Financial Review or other sources) that discuss the release of new information for any two listed companies on the Australian stock exchange (perhaps an earnings or dividend announcement). What effect, if any, did the release of this information have on the market price of the respective company? Did the market anticipate this information? Is this behavior consistent with the efficient market hypothesis?
Limit your answer for part (a) and (b) to 500 words in total, excluding references.