Semester 1 2021
Assessment: Project
Weight: 20%
Learning Outcome: 2.1, 2.2, 2.3, 2.5, and 2.6
Description
In this project, you need to demonstrate your understanding of the equity risk premium. You need to identify the techniques for estimating the equity risk premium and demonstrate the techniques using numerical examples. Finally, you need to report on the Australian equity risk premium and compare the premium against international markets.
You need to submit the project in Turnitin. The submission link is provided in the Blackboard. The word limit of the project is 3,000.
Assessment criteria
- Describe the equity risk premium using scholarly resources
- Identify the methods for estimating the equity risk premium
- Demonstrate the estimation of risk premium using various methods with examples
- Provide a literature review on risk premium using scholarly articles
- Demonstrate the impact of the various macroeconomic conditions on equity risk premium
- Provide historical perspectives on the Australian equity risk premium
- Compare the Australian equity risk premium with international markets
Essay Marking Criteria
| Content | Marks |
| Presentation Neatness, layout, correct spelling and grammar, page numbering, consistency of formatting and font size, and readability Essay is written in a complex and integrative style that is not disjointed in concepts, paragraphs or writing style. Within word limit of 3,000 words +/- 10% (marks will be deducted for being over limit) | 10 |
| Describe equity risk premium | 5 |
| Identify the methods for estimating equity risk premiums | 15 |
| Demonstrate the estimation of risk premium using various methods with examples | 10 |
| Provide a literature review on risk premium using scholarly articles | 15 |
| Demonstrate the impact of the various macroeconomic conditions on equity risk premium | 10 |
| Provide historical perspectives on the Australian equity risk premium | 15 |
| Compare the Australian equity risk premium with international markets | 10 |
| Conclusions drawn An integrative and complex style conclusion that has been drawn from the arguments presented within the essay discussion. Student is clearly presenting a complex interpretative summary of the essay discussion. | 5 |
| Research and referencing and referencing style Appropriate and correctly used referencing style throughout the project | 5 |
| 100 |
Marking Rubrics
| Grade | Weight (%) | Marking Criteria/ Standards |
| High Distinction | 80 – 100 | Provides the answer based on appropriate theoretical understanding. Interprets the theory of risk premium accurately, clearly states assumptions and builds arguments creatively and in a highly-disciplined manner. Identifies the main methods of estimating equity risk premiums and clearly demonstrates the underlying assumptions in each method. Critically evaluates the difference in each method. Provides excellent findings of the main scholarly articles and compare the findings of the study. Provides comprehensive empirical evidence of equity risk premiums in Australia for 20 years. Compares the Australian equity risk premium with international markets and justifies the difference in equity premiums Provides outstanding critical evaluations of the findings in regards to theory. |
| Distinction | 70 – 79 | Meets the standards set for High Distinction. However, a key element is not clearly articulated. Demonstrates excellent understanding of all relevant concepts and theories and presents the ideas in a logical and well-integrated manner. The literature review is comprehensive but the findings are not well explained. Compares the equity risk premium of Australian against international markets; however an explanation is not given. |
| Credit | 60 – 69 | Provides an answer based on appropriate theoretical model[s] Correctly determines inputs required for any calculations required and provides complete workings for the solution that are substantially correct. Identifies the main methods in estimating equity risk premiums; however, the distinctions among the methods are not clearly specified. The literature review is not comprehensive. Demonstrates a good understanding of the relevant concepts and theories, however, a key element of the explanation is absent. |
| Pass | 50 – 59 | Provides an answer based on appropriate theoretical models. Estimating methods of equity premiums are provided; however, assumptions are not specified. The literature review is not comprehensive. Presents the response in a decipherable manner, but it could be better structured and more tightly focussed. Additionally, the explanation may not be complete. |
| Fail | Below 50 | Displays a limited understanding of relevant theoretical models; however, interprets the information given in the question incorrectly. Uses flawed arguments not well founded in theory Presents a substantially incomplete response. Presents the response in a poorly structured fashion. Illegible answers or answers using models, formula or methodology not relevant to the question will be assigned 0%-20% marks. |
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