Create the line charts for each of S&P, Boeing and IBM series using Close prices against time in Excel and comment on your observations (focusing on different features a time series can exhibit). 2....

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9
th
-October-2017
Task 1
S&P
S&P which the biggest proxy for equity markets in U.S shows that the market has been on the
constant upside since last few years. The markets have been resilient and performing well
over the last few years.
Boeing
In line with stock market movement, Boeing’s stock price has been on an high ever since.
The market is seeing some downturn during the period. The stock has been steadily up as
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S&P
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BOEING COMPANY
aviation industry as whole is going through decent times. The order book the company is
pretty strong and the same is helping the company in the long run and market is appreciating
the same with decent uplift in stock prices.
IBM
IBM is one of the big technology giant and has been known to set precedents in the whole set
of business. However just like any technology company in the last two years there has been
huge pressure on the industry as the whole sector is facing headwinds. The exchange rates;
falling spending across the globe and concerns related with outsourcing business has hit the
sector hard. Across the board, IBM is undergoing significant change. The company strives to
remake itself in the digital age, while also maintaining a large and more traditional IT
customer base. IBM retains one of the largest partner networks, and its consulting and service
businesses are wide in scope and deep in penetration. The difficulty for the company comes
from how it historically has made money and grown its revenue base. Some traditional
product offerings are in a declining revenue position, but IBM offerings are broad and
difficult to unseat. The IBM sales force is both an advantage and a disadvantage, in that it has
cultivated strong relationships with enterprise clients. As customers seek offerings from new
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IBM
digital markets, the sales teams struggle to keep up with the rapidly shifting nature of IBM's
business.
Interest Rate in U.S
Interest rate has been the biggest determinant on how the economy will shape up. Interest rate
has been pretty low since 2008 as global recession happened. However post 2014 end,
interest rate hardening has started, however the pace has been pretty slow. It is expected that
as Fed squeezes its balance sheet and trim the bond buyback program, interest rate hardening
will take places and markets will again feel the punch. Markets are expected to feel money
squeeze as capital becomes expensive.
Task 2a
S&P BOEING COMPANY IBM
Returns 26.84442 32.67361229 3.01165343
The table above shows the return of each of the concerned equity instruments and the index.
In this case there are N+1 observation and hence cases of total N returns. This is the log
return of concerned instruments.
Task 2b
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INTEREST RATE ON US -TREASURY NOTE
Jacques Barra Test
JB (observed value) 2.239
JB (critical...