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• The aim of this assignment is to elaborate a report describing stock market price evolution of two publicly traded companies
• Analysis of two data sets using the descriptive tools
Course: Data Analysis for Managers. Banking and Finance major
Submission deadline: 24th Nov 2021, 6:00pm GMT+8 time, Quality of Work:
• Must be provided in a high-quality with appropriate theories, calculation, methodologies, explanation for MBA-Banking and Finance level.
• Demonstrate deep understanding of a company’s capital structure apply and critically evaluate different sources of financing.
• Demonstrate advanced knowledge and understanding treasury risk and interest rate risk.
OBJECTIVE of the Assignment:
The aim of this assignment is to elaborate a report describing stock market price evolution of two publicly traded companies. Prepare a business report that will answer the assessment questions and that should be supported with all the necessary analysis (plots, tables etc.).
Please follow the order of questions and provide a clear answer to each of them, attach an excel file with all the calculations conducted.
Please notice that the excel file alone will not be evaluated as the assessment should be elaborated using the standard business report format.
• Demonstrate a knowledge of advanced quantitative business methodologies (principles, theories, and methods) and their applicability.
• Analyze and classify different management problems using a variety of quantitative methods.
• Apply and use analytical techniques to make recommendations that solve complex business problems.
• Analyze business data within business decision making and determine its importance to draw conclusions and produce business reports.
• Frame and apply different types of decision-making exercises applying the different quantitative business methodologies.
Choose two well-known companies listed on the New York stock exchange (or any other stock exchange). For the sake of this exercise please select these companies from two different sectors.
Find the data for its daily stock price for the period of at least 5 last years (you need to use the same time span for both companies). I recommend using the finance.yahoo.com web page that allow to download a data for publicly traded companies for free (please see the appendix how to download data from finance.yahoo.com). You can also use Google Finance and spreadsheet in Google to download the data as well.
You will need to convert stock prices into returns as than the analysis for two companies will make sense – the easiest way to calculate the daily return is to take: closing price of day t / closing price of day (t-1) – the previous day. Then divide the difference by the price of the previous day to get the return in % terms.
In such way you will generate the time series of daily returns for these two companies. Please check if the data span is of the same length.
Now please prepare a business report that should be supported with all the necessary analysis (plots, tables etc.). The excel file must be submitted as well however will not be graded as all the solutions and comments must be presented in the business report.
The Business report should be a professional document that contains the following 5 points/answers to the questions:
Part 1. Company description and price evolution:
1. Describe briefly both companies – industry, product, market position (MS word file with 300 words no spaces and MS excel with graph, formula, calculations)
2. Present the graph of both the daily price evolution and daily returns – comment on the price changes and the daily returns. Do you observe any extreme changes? What would be an explanation for them (please support any facts that can support your answer) (MS word file with 300 words no spaces and MS excel with graph, formula, calculations)
Part 2. Statistical analysis:
Please prepare the measures of the central tendency, dispersion and association of variables and based on this answer the following questions:
3. What is the mean stock price return for both companies? What is the meaning of the number you have obtained? Please compare the results obtained for both companies (MS word file with 300 words no spaces and MS excel with graph, formula, calculations)
4. What is the median stock price return for both companies? What is the meaning of the number you have obtained? Please compare the results obtained for both companies (MS word file with 300 words no spaces and MS excel with graph, formula, calculations)
5. Construct a frequency distribution of your choice (the intervals should be chosen by you for showing the distribution of the data in the best way) and percent frequency distribution of the stock price return for the indicated period for both companies. Evaluate the results and compare (MS word file with 300 words no spaces and MS excel with graph, formula, calculations)
• Remember to show all your calculations, cash flow statement in detail as MS excel file. Excel file with all the problems solutions, graphs and all the necessary calculations, with proper formulas and formatting
• Number of words: 1,500 words with detailed explanation for a business report (excluding excel file)
• Make sure you clearly explain, describe assumptions, if any and reference the source of the information used in your calculations.