The firm for the project is JP Morgan Chase. The first 5 questions are already done. The project uses R code for some question and he required code is attached.
Project 1 Firm: JP Morgan Chase 1). Plotted Prices for JPM: The first graph here shows the daily prices of the JP Morgan stock from January 2nd, 2019 to January 20th, 2021. Looking at this graph, we can see a huge decline in the stock price going from the beginning of February 2020 to the beginning of May 2020. This was obviously due to the COVID-19 pandemic that forced a recession at this time. The JP Morgan stock price has gone up since, and is reaching new highs in today’s market. Plotted Returns for JPM: This graph shows JP Morgan stock returns beginning in January of 2019 all the way to January of 2021. The stock returns go up and down and are quite volatile. The biggest instance of this volatility occurs at the same time as the stock prices went down, when the COVID-19 pandemic first began in February of 2020. Confidence Interval for JPM 2020: 95%: -0.004006674 0.004439564 99%: -0.005333674 0.005766564 Confidence Interval for JPM 2019: 95%: -0.00004150197 0.002884834 99%: -0.0005012626 0.0033445942 · For both 2019 and 2020, JPM has a confidence interval including 0, meaning that this is a significant variable for testing T-statistic for JPM 2020 = 0.1004528 · This t-statistic shows that we are very close to accepting the null hypothesis that the mean for JPM 2020 is 0. T-statistic for JPM 2019 = 1.904371 · Because this t-statistic is a relatively Confidence Interval for S&P 500 2019: 95%: 5.747738e-05 2.013632e-03 99%: -0.0002498568 0.0023209662 T-statistic for S&P 500 2019 = 2.075143 One tail and two tail tests for S&P 500 in 2019: alpha.one.tailed alpha.two.tailed CV [1,] 0.100 0.200 -1.284933 [2,] 0.050 0.100 -1.650947 [3,] 0.025 0.050 -1.969460 [4,] 0.010 0.020 -2.341296 [5,] 0.005 0.010 -2.595558 [6,] 0.001 0.002 -3.123018 · Probability here is 3.9%, which means we cannot reject the null hypothesis. Confidence Interval for S&P 500 in 2020: 95%: -0.001784885 0.003417872 99%: 0.002602297 0.004235284 T-statistic for S&P 500 2020 = 0.6151732 · We are 95% confident that the mean for the S&P 500 2020 is between -0.0017 and 0.0034 and 99% confident that the mean is between 0.0026 and 0.0042. Even though this t-statistic is really low, we are still 99% confident that the mean is not 0 and therefore, we can reject the null hypothesis. One tail and two tail tests for S&P 500 in 2020: alpha.one.tailed alpha.two.tailed CV [1,] 0.100 0.200 -1.284920 [2,] 0.050 0.100 -1.650923 [3,] 0.025 0.050 -1.969422 [4,] 0.010 0.020 -2.341236 [5,] 0.005 0.010 -2.595479 [6,] 0.001 0.002 -3.122886 One tail and two tailed tests for JPM profits in 2020: alpha.one.tailed alpha.two.tailed CV [1,] 0.100 0.200 -1.284920 [2,] 0.050 0.100 -1.650923 [3,] 0.025 0.050 -1.969422 [4,] 0.010 0.020 -2.341236 [5,] 0.005 0.010 -2.595479 [6,] 0.001 0.002 -3.122886 Probability is 92%, this means that we cannot reject that JP Morgan’s mean is equal to zero. One tail and two tailed tests for JPM profit in 2019: alpha.one.tailed alpha.two.tailed CV [1,] 0.100 0.200 -1.284933 [2,] 0.050 0.100 -1.650947 [3,] 0.025 0.050 -1.969460 [4,] 0.010 0.020 -2.341296 [5,] 0.005 0.010 -2.595558 [6,] 0.001 0.002 -3.123018 Probability is 5.8%, this means that we can reject that JP Morgan’s mean is equal to zero Confidence Intervals for Amazon: 95%: -0.004006674 0.004439564 99%: -0.005333674 0.005766564 T-statistic for Amazon = 0.1004528 · We are 95% confident that the mean for Amazon is between -0.0004 and 0.0044 and 99% confident that the mean is between -0.005 and 0.006. The t-statistic tells us that we probably cannot reject the null hypothesis that the mean is equal to 0. One tail and two tailed tests for Amazon alpha.one.tailed alpha.two.tailed CV [1,] 0.100 0.200 -1.284920 [2,] 0.050 0.100 -1.650923 [3,] 0.025 0.050 -1.969422 [4,] 0.010 0.020 -2.341236 [5,] 0.005 0.010 -2.595479 [6,] 0.001