Analysis of statistical status of bank based in uae
The assignment would consist of a written report on a specific topic relevant to towards quantitative business issues. Due to the status of the financial crisis nowadays, it is a must for fresh finance professionals like graduates to fully understand that the different scenes between the crisis.
This semesteras topic is as follows:
You are recruited by ADCB and your first task is to showcase your ability to show your analytical skills when dealing with stocks in the financial markets. The CFO wants to know which variable(s) affect stock prices, divides your tasks in 2 parts:
1. Choose 1 publicly listed company in the UAE, within the banking sector and analyze the companyas stock using your quantitative skills, e.g calculate the mean and the variance of the stock prices and return if you invest over 1 year period.
2. Make a forecast of how the stock will perform after 1 week period. Your project should include, but not restricted to the following sections:
a. A brief historical background of the company in terms of performance, benchmarking against industry, and major changes in the past or foreseeable future.
b. Analysis of company using quantitative tools learnt throughout the course. Knowledge and skills of other fields like management, marketing, accounting among others can also be complemented to your project if you feel it would add value to your recommendations.
c. A simple forecast of what you would expect the share price to be, based on your underlying model(s), and other information like macroeconomic news. (Hint: Use OLS Model as a starting point)
d. Present to the class whether your forecasts were realistic when compared to the actual prices. If not, justify possible reasons of such deviations.
Note: Make sure you demonstrate your skills in the following quantitative measures:
– Correlation Coefficient among variables.
– Coefficient of Determination
– Test what is the probability of the share price falling below 25 % from its average values, and the probability that the return will rise above 15% from its average. Make sure that you demonstrate understanding of the probability distribution functions you are using. (Hint: Evaluate the assumptions underlying each distribution functions before calculating the probabilities)