Security Analysis Assignment IBM

   

Added on  2020-03-16

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Running Header: SECURITY ANAYLSIS1Security AnalysisStudent's name:Institution:Professor's name:Course:
Security Analysis Assignment IBM_1
Security analysis21.Time series graphs are vital in determining the patterns of a model over a period of time (Madsen, 2007). The time series charts to be developed for S&P 500, BA and IBM are needed todescribe vital features of the time series pattern, to forecast future series' values, explain how the past impacts the future, and to maybe provide a controlled standard for a variable. The vital characteristics considered in a time series include the trend, long-run cycle, seasonality, outliers, constant variance and abrupt changes (George et Al., 2005). a. S&P 500 Price Figure 1: S&P 500 price time series7/1/201010/1/20101/1/20114/1/20117/1/201110/1/20111/1/20124/1/20127/1/201210/1/20121/1/20134/1/20137/1/201310/1/20131/1/20144/1/20147/1/201410/1/20141/1/20154/1/20157/1/201510/1/201505001000150020002500S&P 500From figure 1 it can be seen that the S&P 500 has a trend which is increasing over time. However, the trend does not show any seasonality as there are no significant outliers. Other observations that can be made from the time series are that the S&P 500 has no abrupt changes and no period unrelated to seasonality factors.
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Security analysis31. Time series chartsb. Boeing Company (BA) Stock PriceFigure 2: BA stock price time series7/1/201010/1/20101/1/20114/1/20117/1/201110/1/20111/1/20124/1/20127/1/201210/1/20121/1/20134/1/20137/1/201310/1/20131/1/20144/1/20147/1/201410/1/20141/1/20154/1/20157/1/201510/1/2015020406080100120140160BALike the S&P time series, it can be seen that the trend for Boeing Company is increasing over time. The figure shows that the trend line has outliers. The outliers are values which are far away from the trend line. However, it can be seen that the time series has no abrupt changes, no seasonality or any long-run-cycle. c. International Business Machine (IBM) stock priceFigure 3: IBM stock price time series
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Security analysis47/1/201010/1/20101/1/20114/1/20117/1/201110/1/20111/1/20124/1/20127/1/201210/1/20121/1/20134/1/20137/1/201310/1/20131/1/20144/1/20147/1/201410/1/20141/1/20154/1/20157/1/201510/1/2015050100150200250IBMFrom figure 3, it is seen that IBM has no trend. Thus, the price of stocks can be seen to rise from 7/1/2010 to1/1/2013. From 1/1/2013, the prices of the stock have been on the decline. Moreover, due to a lack of a trend, the stocks can be seen to have no seasonality (Zhang & Min, 2005). Thus, there are no regular repeating patterns of high and lows. Conversely, the time serieshas no abrupt changes, outliers, and long-run cycle.2. a. calculated return for the three-time series can be observed in the Excel documentb. The summary statistics for the return series of the sample are shown in the diagram below.Table 1: Returns summary statisticsSummary statisticsGSPCBAIBMAverage0.9509471.1574430.106686Variance12.3714833.3197422.12779
Security Analysis Assignment IBM_4

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