ECON 1274 /1248– BUSINESS STATISTICS

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ECON 1274 /1248– BUSINESS STATISTICS

Assessment Task Two – PROJECT

Project Guideline:

This is a group assignment. Only two students in a group. There will be two parts to the assignment.

Part A: Data collection and preliminary Data Analysis

Part B: Further Statistical Analysis and Business Report and individual reflective piece presentation

Part B requires you to complete a micro-credential on cross-cultural communication and a short market appraisal where you show your reflections on how you presented the information for a multicultural audience.

The answers and calculations for Part A and B must be collated into a brief business report of approximately 8-10 pages (including the cover page). The structure of the business report requires: a title; executive summary; introduction, body of work and conclusion/s.

Please clearly indicate your student ID and name for your individual reflective work.

The allocation of marks:

Part A            30 marks

Part B            50 marks

Total              40% towards your final result.

You must submit an electronic copy of your assignment in Canvas. Hard copies will not be accepted. SHOW YOUR WORK for calculation-based questions.

This assignment requires the use of Microsoft Excel. If you have Windows, you will also need to use the Data Analysis ToolPak. If you have a Mac with Excel 2011, you may need to use StatPlus:MAC LE.

INSTRUCTIONS TO STUDENTS

1. Due date:

Project Submission form is due in Week 4. You must submit to your lecturer by email.

Part A

    By end of Week 6. via CANVAS/Turnitin

Part B:    By end of week 10. via CANVAS/Turnitin

2. Lodgement:

This project must be submitted via Turnitin together with the assignment cover page. You need to also submit a copy of EXCEL data analysis file.

1) Excel file with required data and data analysis

2) Word /pdf document with answers to all questions and other requirements listed in project file.

3) You must attach a cover sheet with both submissions.

Both forms as well as the assignment cover page can be accessed from Canvas You are advised to retain a copy of your project.

3. Penalty for lateness

Late submissions will be penalised at a rate of 10% of the overall mark per day.

4. Table of contents and referencing

Your project must provide a table of contents, references and any appendices, if required. These do not count towards your word limit.

Students are required to acknowledge all sources of information and to include a bibliography of cited texts. For guidelines on referencing, see a document on canvas titled, “Guidelines for Referencing.”

Note that failure to acknowledge sources and to properly reference information will result in the material not be included in your assessment or a mark deduction for the question. Students are to use their own words to demonstrate understanding of the Statistic theory and its application.

Problem Description:

It is time for you start thinking about investing some of your hard-earned dollars in the stock market. You will be allocated two companies which will be in your watchlist. Give brief introduction based on (fundamental analysis) from http://au.finance.yahoo.com or ASX. However, before you do any investing, you need to do some research regarding the two companies that you are interested in. It is time for you to take a closer look at the performance of the two-company stock over the last year (i.e. from Jun 1, 2020 to Jul 19, 2021). For all data analysis use EXCEL. To calibrate and analyse stock prices, there will be simple formulas in descriptive statistics, inferential statistics and multiple linear regression formulas are provided to assist you with stock analysis. You will be allocated two stocks by your lecturer.

Part A: 30 marks

Make sure you clearly number the question number and answer them in the same order as in the assignment below.

1. Download weekly prices of the two companies following the instructions given below an save as EXCEL spreadsheet. Organise all the closing prices in one spreadsheet. Clearly state your investments goals. (3 marks)

Note: You may delete other prices (opening and adjusted)

2. Using the series of closing prices, calculate the weekly rate of return for the two companies. (2 marks)

Hint: the formula for a return is 100 x (Current Price –Previous price))/(Previous price)

3. Calculate the descriptive statistics for each of the two companies/stocks weekly rate of return from the data and display in a table. Show the output from Excel. (2 marks)

4. Describe each of the company/stock/index weekly returns and write a brief summary. Be sure to comment on the,

a) central tendency

b) variability and

c) Shape of distribution (6 marks)

5. Draw a Histogram and a Frequency polygon graph that displays the distribution of each company/stock/index weekly returns. Be sure to comment on the shape of distribution. (3 marks)

6. Create a box-and-whisker plot for the distribution of weekly returns and describe the shape. Is there evidence of outliers in the data? List the outliers if you there are any. (6 Marks)

7. Calculate the probability of loss of each company/stock/index.

Hint: Use count function to count negative returns and divide by the sample size (x/n) (2marks)

8. Estimate the 99% confidence interval for the population mean Rate of return of each company/stock/index and interpret your results. Make sure to construct confidence interval for both stock 1 and stock 2. Do you have to make any assumptions for the estimation? Explain why? (6 marks)

Instructions

i. Go to Yahoo! Finance at http://au.finance.yahoo.com

ii. Enter the stock symbol and click on GO

iii. Once you got the recent quote, click on Historical Prices on the left panel

iv. Enter the under-TIME Period tab start (1.6.2020) and end dates (19.7.2021), select under Frequency tab Weekly, and click on Apply

v. Once you received the historical prices, and click on Download to Spreadsheet

Part B: 50 marks

Make sure you clearly number the question number and answer them in the same order as in the assignment below

1. The All-Ordinaries (^AORD) is one of the benchmark stock market indices for Australian equities. The past year average rate if weekly returns of All-ordinaries is approximately 0.12%. Test if each of your company/stock/index weekly returns is significantly different from 0.12% at α =10% level of significance. Use Testing of hypothesis and Show all six steps (for each company) including calculations. You must use critical value method. Make sure you do hypothesis testing for both stock 1 and stock 2. (10 Marks)

2. Run a Correlation analysis using EXCEL to explore the relationship between the two company/stock/ prices. (6 Marks)

a) Show the output from Excel.

b) Interpret the correlation coefficient.

c) Do you think combining these two stocks will reduce risk of investment in your portfolio? Explain.

3. Run a simple linear regression using EXCEL (11 Marks)

a) Use Time period and Stock 1 prices. Show the output from Excel ( note the weeks must be changed to time periods 1,2,3…)

b) Set up the linear regression equation Stock 1

c) Test the significance using p-value with α =0.05. Stock 1

d) Use Linear regression equation (from b) forecast the stock price for end of September 2021. Stock 1

e) Draw Time-series plot Stock 1

f) Do you notice any trend in e)? How would you adjust your forecast above in Q d)?

4. Run a simple linear regression using EXCEL (11 Marks)

a) Use Time period and Stock 2 prices Show the output from Excel ( note the weeks must be changed to time periods 1,2,3…)

b) Set up the linear regression equation Stock 2

c) Test the significance using p-value with α =0.05. Stock 2

d) Use Linear regression equation (from b) forecast the stock price for end of September 2021. Stock 2

e) Draw Time-series plot for Stock 2

f) Do you notice any trend in e)? How would you adjust your forecast above in d)?

5. Combine PART A and B: including the following for the final submission (2 marks)

● a title

● table of contents

● introduction

● investment goals

● trends and conclusions

● reference

● a discussion log as appendix (A discussion log is a means to record the relevant points covered during a meeting. It is suggested that the team meets at least once a week)

6. Write your findings in a brief business report no more than 200 words on whether you can confidently recommend investing ONE of two companies (This is done individually and submitted individually). Hint: draw on the evidence you have gathered from Part A and Part B, as well as other information/evidence not covered here but you believe is useful. (8 marks)

7. Write a reflection on how you structured / presented the information so that it was suitable for a multicultural, possibly multilingual audience (using knowledge learned in the micro-credential). (This is done individually and submitted individually) (2 marks)