Lab Activity - Week 1 - Financial modelling in excel Week 1 tutorial question PDF

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Financial modelling in excel Week 1 tutorial question...

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ECOM116 – Financial Modelling in Excel Lab Activity – Week 1

Exercise 1 a) Provide an example of time series data b) In the excel file “Lab Activity – Week 1” (exercise 1) you have two examples of panel data. Explain the characteristic of panel data. c) Panel data could be balanced or unbalanced. Which of the two examples in the file “Lab Activity – Week 1” (exercise 1) is a balanced panel data and which one in an unbalanced panel data?

Exercise 2 In the excel file “Lab Activity – Week 1” (exercise 2), the stock prices for Microsoft and IBM are reported. Data are for the period 2010-2019. a) b) c) d) e)

What is the format of the variables: string, numeric, etc.? Is this sample or population data? Calculate the return for each stock. Calculate the average return for each stock. Calculate the sample standard deviation for each stock. What is the standard deviation and why is it extremely used in finance? f) Calculate the sample variance for each stock. g) Calculate skewness and kurtosis. h) Using the information calculated in the points above, are returns normally distributed? Explain. i) Calculate the covariance and the correlation between the two stock returns. Interpret the results.

Exercise 3 Which one of the following proprieties is not always true for any two random variables X and Y? Explain why. a) b) c) d) e)

E(X + Y) = E(X) + E(Y) E(5+3Y) = 5 + 3E(Y) E(3X - 2Y) = 3E(X) - 2E(Y) Var(3 + 2X) = 4Var(X) Var(X + Y) = Var(X) + Var(Y)...