BUA4004 Statistics for Business and Finance Assignment Help

Assignment Detail:- BUA4004 Statistics for Business and Finance - La Trobe University You have been asked by your client to recommend which of two available stocks will perform better over time, relative to risk- In this assignment, you examine the relationship between risk and return of two stocks over time and present your findings as a formal written report -detailing your calculations and findings-- The objectives of this assignment are to 1- -i- let you practise quantitative analysis commonly undertaken by business-degree graduates at work;2- -ii- learn how and when to use different quantitative methods covered in the subject- This is a teamwork assignment, worth 15% of the total assessment- This assignment is based on topics including; Sampling and Estimation, Hypothesis Testing, and Regression Analysis- Variables and data sources PNSDQ = NASDAQ stock exchange's composite price index -NSDQ- This variable is measured in US dollars- You will use it as a market portfolio, and will hence use the return generated from this variable -RNSDQ- as the market return RM = RNSDQ- Part 1: Download and prepare the data for analysis * First, choose the leader of your team- * Second, using the table below, identify the Data Group by the team leader's student ID number- -For example, if the team leader's student ID number is 20430066, then the team's Data Group is A-- Part 2: Hypothesis testing of means and variance equality -i- Perform and report the Jarque-Berra test of normally distributed returns for each of the two stocks, RTSLA and RPFE- Given your test results, what do you infer about the distribution of returns to each company's stock???? -ii- Test the hypothesis that the average return on TSLA is different from 3 percent at the 5% level of significance- Make sure you present the test step by step leading to the conclusion, explaining which test statistic you use to perform this hypothesis test and why- -Hint: Hypothesis test about a population mean- -iii- Before investing in one of the two stocks, we would like to compare the risks associated with the two stocks- For this comparison, perform and present an appropriate hypothesis test at the 5% level of significance, and interpret your result- -Hint: Hypothesis test about homoskedasticity- -iv- We would also like to check whether both stocks have the same return on average- Using the confidence interval approach, perform and present an appropriate hypothesis test at the 5% level of significance, and interpret your result- Which stock would you prefer and why???? -Hint: Hypothesis test about two population means- Zero mark if you test using an approach other than the confidence interval approach-- Part 3: Regression analysis and inference In this last part of the assignment, your team will focus on the preferred stock chosen in the last question above- -i- First, compute the excess market return, i-e- X = RM - RF- Then, compute the excess return on your team's preferred stock, i-e- Y = Rpreferred company stock - RF- -This is assessed in the Excel file only- Do not include in the PDF file-- -ii- Estimate the Capital Asset Pricing -CAP- model by regressing the excess return on your preferred stock -Y- on the excess market return -X-- Then, report your regression results in an equation form- -iii- Give a regression interpretation of the estimated CAPM beta coeficient -i-e- slope coeficient-- Additionally, what does the coeficient imply in terms of the stock's riskiness in comparison with the market???? -In not more than a few sentences- -iv- Interpret the 95% confidence interval for the slope coeficient- -In not more than a few sentences- -v- Interpret the value of the coeficient of determination R2- -In not more than a few sentences- -vi- Perform and report a hypothesis test to infer whether your preferred stock is an aggressive stock at the 5% level of significance- -vii- One of the assumptions of the linear regression model is that random errors are normally distributed- Perform and report an appropriate hypothesis test to determine whether it is plausible to assume normally distributed errors- Attachment:- Statistics for Business and Finance-rar

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