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BUS5SBF: Statistics for Business and Finance

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Statistics for Business and Finance (BUS5SBF)

   

Added on  2020-05-16

BUS5SBF: Statistics for Business and Finance

   

Statistics for Business and Finance (BUS5SBF)

   Added on 2020-05-16

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Running head: STATISTICS FOR BUSINESS AND FINANCE Statistics for Business and FinanceName of the Student:Name of the University:Author’s note:
BUS5SBF: Statistics for Business and Finance_1
1STATISTICS FOR BUSINESS AND FINANCETable of ContentsIntroduction:................................................................................................................................................................................................2Discussion:...................................................................................................................................................................................................21.Line Chart of Price indexes:.............................................................................................................................................................22.Calculation of return prices of each prices:......................................................................................................................................32.a. Calculation of returns of S&P500, GE and IBM:.........................................................................................................................32.b. Summary Statistics:......................................................................................................................................................................32.c. Test of normality by Jarque – Bera test:.......................................................................................................................................33.Testing of average return price of GE:.............................................................................................................................................44.Comparison of risk associated to both BA and IBM price indexes:.................................................................................................45.Comparing the average returns of GE and IBM investing price indexes:........................................................................................46.Calculation of Excess Return and Excess Market Return:...............................................................................................................57.CAPM calculation by linear regression method:..............................................................................................................................57.a. Estimation of CAPM using linear regression:..............................................................................................................................57.b. Interpretation of Coefficients:.......................................................................................................................................................57.c. Interpretation of R2:.......................................................................................................................................................................67.d. Construction of 95% confidence interval for Slope Efficient:.....................................................................................................68.Preferable neutral price return:.........................................................................................................................................................69.Normal Probability Plot by Orthogonal Least Square Method:.......................................................................................................6
BUS5SBF: Statistics for Business and Finance_2
2STATISTICS FOR BUSINESS AND FINANCEIntroduction:The report discusses about the volatility and risk market, return and market return that is observed as previous studies. Thereport also focuses to refer the method of evaluating the company’s price indexes through its market price movements. The priceindexes for GE and International Business Machines (IBM) has been selected for representing. However, the historical price data ofthe individual values from 1st February 2010 and 31st July 2015 cannot illustrate the proper results. Hence, the historical index pricesof S&P500 index and the 10 years’ US Treasury Bill are included in the valuation process for computing the beneficial results.S&P500 index shows the market summarisation and the 10 years’ US Treasury Bill indicates the risk-free return of the market values. Discussion:1.Line Chart of Price indexes:The trend of the market prices for a definite time-period depicts market prices trend. The first line chart includes all the three typesof trend lines of price indexes. The second, third and fourth line charts include the line charts independently. The price indexes of inthe line charts are:2/1/20104/1/20106/1/20108/1/201010/1/201012/1/20102/1/20114/1/20116/1/20118/1/201110/1/201112/1/20112/1/20124/1/20126/1/20128/1/201210/1/201212/1/20122/1/20134/1/20136/1/20138/1/201310/1/201312/1/20132/1/20144/1/20146/1/20148/1/201410/1/201412/1/20142/1/20154/1/20156/1/201505001000150020002500Comparison of Stock PricesS&P500BAIBMDatePriceIndex2/1/20104/1/20106/1/20108/1/201010/1/201012/1/20102/1/20114/1/20116/1/20118/1/201110/1/201112/1/20112/1/20124/1/20126/1/20128/1/201210/1/201212/1/20122/1/20134/1/20136/1/20138/1/201310/1/201312/1/20132/1/20144/1/20146/1/20148/1/201410/1/201412/1/20142/1/20154/1/20156/1/201505001000150020002500S&P500 Stock PriceS&P500DatePriceIndex
BUS5SBF: Statistics for Business and Finance_3

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