applied management of statistics

BCO127 Applied Management Statistics Task brief & rubrics

Task: Final Assignment

· individual

· file format: .doc or .pdf.

Formalities:

· Wordcount: No more than 1000 words. All questions should be answered.

· Cover, Table of Contents, References and Appendix are excluded of the total wordcount.

· Font: Arial 12,5 pts.

· Text alignment: Justified.

· The in-text References and the Bibliography have to be in Harvard’s citation style.

Submission: Sunday, 9th of May, Time: 23:55.

Weight: This task is a 40% of your total grade for this subject.

It assesses the following learning outcomes:

· Ability to use regression analysis with real-world financial data

· Ability to test statistical hypothesis in cases close to reality

· Understand and interpret linear regression equation

Question 1 (50 points):

The quality control manager at a light-bulb factory needs to determine whether the mean life of a large shipment of light bulbs is equal to 375 hours.

The population standard deviation is 100 hours. A random sample of 64 bulbs indicates a sample mean life of 350 hours.

Question 2 (40 points):

Fitting a straight line to a dataset yields the following prediction line:

Question 3 (10 points):

1. Choose any stock of your interest from the US market.

2. Collect stock prices daily data (last 60 trading days, adjusted close price), collect the SP500 index data (last 60 trading days, adjusted close price). You might find useful to get the data from Yahoo Finance.

Link: finance.yahoo.com

3. Compute returns for each trading day using the following formula:

Returns_today = (Price_today – Price_yesterday)/Price_yesterday

Do that for your stock of interest as well as for the SP500 index.

4. Run a regression of stock returns on SP500 returns.

5. The coefficient of SP500 returns, we will call in finance beta coefficient computed using market model. Interpret beta of your stock.

You might find this link useful: https://www.investopedia.com/terms/b/beta.asp#types-of-beta-values

Rubrics:

	Exceptional 90-100	Good 80-89	Fair 70-79	Marginal fail 60-69
Knowledge & Understanding (20%)	Student demonstrates excellent understanding of key concepts and uses vocabulary in an entirely appropriate manner.	Student demonstrates good understanding of the task and mentions some relevant concepts and demonstrates use of the relevant vocabulary.	Student understands the task and provides minimum theory and/or some use of vocabulary.	Student understands the task and attempts to answer the question but does not mention key concepts or uses minimum amount of relevant vocabulary.
Application (30%)	Student applies fully relevant knowledge from the topics delivered in class.	Student applies mostly relevant knowledge from the topics delivered in class.	Student applies some relevant knowledge from the topics delivered in class. Misunderstanding may be evident.	Student applies little relevant knowledge from the topics delivered in class. Misunderstands are evident.
Critical Thinking (30%)	Student critically assesses in excellent ways, drawing outstanding conclusions from relevant authors.	Student critically assesses in good ways, drawing conclusions from relevant authors and references.	Student provides some insights but stays on the surface of the topic. References may not be relevant.	Student makes little or none critical thinking insights, does not quote appropriate authors, and does not provide valid sources.
Communication (20%)	Student communicates their ideas extremely clearly and concisely, respecting word count, grammar and spellcheck	Student communicates their ideas clearly and concisely, respecting word count, grammar and spellcheck	Student communicates their ideas with some clarity and concision. It may be slightly over or under the wordcount limit. Some misspelling errors may be evident.	Student communicates their ideas in a somewhat unclear and unconcise way. Does not reach or does exceed wordcount excessively and misspelling errors are evident.