1. Suppose that your company is based in the UK but has significant sales in the US. You want to hedge your currency exposure for when you convert US dollars back to British Pounds. Should you go long or short the contract?

(Covering concepts for Chapter 3 and 8)

The following attached file presents the annual returns for two mutual funds offered by the investment giant Fidelity. The Fidelity Select Automotive Fund invests primarily in companies engaged in the manufacturing, marketing, or sales of automobiles, trucks, specialty vehicles, parts, tires and related services. The Fidelity Gold Fund invests primarily in companies engaged in exploration, mining, processing, or dealing in gold and, to a lesser degree, in other precious metals and minerals.

In a report, use the above information and attached file to

1. Calculate descriptive statistics to compare the returns of the mutual funds using the Data Analysis Descriptive Box.
2. Compare and interpret the mean, median and skewness of Fidelity Select Automotive Fund and Fidelity Select Gold Funds.

3. Compare and interpret the range and the standard deviation of Fidelity Select Automotive Fund and Fidelity Gold Funds.
4. Discuss the range of each funds returns? Is the range the best descriptive measure? Why or Why not?
5. Assess reward by constructing and interpreting 95% confidence intervals for the population mean return. What assumption did you make for interval estimates?

Example p. 314/ Note Use standard deviation as a measure of risk!

3.

(5.15) Manatees are large, gentle, slow-moving creatures found along the coast of Florida. Many manatees are injured or killed by boats. below contains data on the number of boats registered in Florida (in thousands) and the number of manatees killed by boats for the years between 1977 and 2013. (data are distorted):

(a) Find the correlation rr (±±0.001)

rr =

(b) Find the equation of the least-squares line (±±0.001) for predicting manatees killed from thousands of boats registered.

yˆy^ = +xx

(c) What would you predict (±±0.1) number of manatees killed by boats to be if there are 900,000 boats registered?

(d) Predict (±±0.1) manatee deaths if there were no boats registered in Florida.

                                                                       Assignment 1( New Version)

You have the following   data on quantity demand of commodity X and its price and other factors during 1991-2005:-

Based on the above data:-

1. Draw the relationship between Q & P?
2. Using the OLS, estimate the demand function in linear form.
3. Comments on the results by taking into account any prior expectations you have about demand functions.

      4) Compute the predictable value of the dependent variable & the residuals?

     5) How much the change in Px, Py and Expenditures ( M) explains the variations in Q?

       6) Interpret the empirical results of the estimated equation?

        7) Calculate demand elasticities at the mean.

        8) Construct a confidence internal at 95% of estimated own price elasticity at the

            mean   and in the year of 2005?

         10) Construct a confidence interval of the quantity demanded in the years 2005 and in

         the year 2008 when Px=7, Py=3.5 ,Expenditures =1900

Above is a CSV file from the file do the following:

(a) Subset the data to include only those from 1947 to 1964.

(b) Fit a linear regression model, M1, to model population as a function of the year using this data from 1947 to 1964.
(c) Predict the population for the missing years 1955 and 1960.
(d) Plot the population versus Year including the predicted values for 1955 and 1960 in the range 1947 to 1964. The predicted values must be annotated (marke

The following table contains the historic returns from a portfolio consisting of large stocks and a portfolio consisting of long-term Treasury bonds over the last 20 years. T-bills returns represent risk-free returns. Analyze the risk-return trade-off that would have characterized these portfolios. The following dataset is also available in Excel format in Module 3 Resources on Canvas. Returns in the dataset are in percents. For example, 31.33 means 31.33% per year.

a. Estimate the annual risk premium of large stocks and T-bonds, respectively.

b. Estimate the annual volatility of large stocks and long-term T-bonds, respectively.

c. Estimate the Sharpe ratio of large stocks and long-term T-bonds, respectively.

d. Now assume that you have always invested half of your wealth in the stock and the other half in the T-bonds. Estimate the Sharpe ratio of your portfolio.

1) Using the excel data file “US violent crime” which shows the violent crime rate in the US from 1960 to 2012:

(20 pts) Make a time series plot of the data

(5 pts each 25 pts total) Determine the following: Mean, Median, Standard deviation, Q1 and Q3. (25 pts)

Make a histogram of the data. Hint the year is not used, you need to determine how many years fall into each of the classes.

(7) What are your thoughts on the time series plot, i.e. trends etc.?

(8) Thoughts on the histogram i.e. shape of distribution etc.?

[Excel sheet]

a) Using the 1949 oil price and the 1969 oil price, compute the annual growth rate in oil prices during the 20 yr period. b) Compute the growth rate between 1969 & 1989 and between 1989 & 2017. c) given the price in 2017 and your growth rate between 1989 and 2017 compute the future price of oil in 2020 & 2025.

You receive a year-end statement from your broker that details your stock ownership over the years, and the total gain or loss over the holding period for each. You want to devise a method to make a meaningful comparison of the returns in order to determine which stock performed the best and which performed the worst. The problem is, the holding periods all have different starting and ending dates and are different lengths.

Stock returns
Stock   Buy date   Buy price (P0)   Sell date   Sell price (P1)   Total return
((P1-P0)/P0)
A   1/1/2002   16.00   1/1/2016   25.00   56.3%
B   1/1/2014   87.00   1/1/2015   80.00   -8.0%
C   1/1/2008   26.00   1/1/2014   28.00   7.7%
D   1/1/2001   17.50   1/1/2008   23.50   34.3%
E   1/1/2004   76.00   1/1/2007   68.00   -10.5%
F   1/1/2006   12.00   1/1/2016   13.00   8.3%


What is the best way to compare the returns of these stocks?
   Use the return over the entire holding period for each stock to compare
   Using the total return over the holding period for each stock, take the geometric mean to get the one year average return, and compare
   Find the dollar change of each stock (Sell price minus Buy price) and compare
   Using the total return over the holding period for each stock, take the straight average to get the one year average return, and compare