Financial Modelling Report Essay Example | Topics and Well Written Essays - 2000 words - 1

Financial Modelling Report - Essay ExampleOwing to the strong impact that 2008 fiscal crisis caused in the financial markets especially by exacerbating market volatility this project get out also compare the variable consanguinitys before the crisis and after the crisis with the consider of finding out whether the crisis had caused any significant changes in the stock market dynamics.The analysis go forth primarily involve generation of line graphs, scatter plots, relationship tables, and use of regression analysis to compare the relationship between various variables. Analysis of regression statistics and scatter plots will be generated by SPSS while charts will be generated by Microsoft excel worksheets. The output generated from SPSS will be synthesized and presented in tables in a manner that is easy to read and understand. The dependent variable will be the return and the independent variables will include size of firm, book-to-market ratio, beta and three geographical regio ns including America, Asia and Europe. The three variables will be presented as dummy variables to enable multi-regression analysis. Consequently, number 1 will be assigned to the region that the sample has been obtained and 0 will be assigned to the other regions that the sample has not been obtained. important is used in CAPM to measure systematic risk or volatility of a particular security relative to the market as a in all (Zhang, Shu and Brenner, 2010). Therefore, the securities with taller beta have more risk than the market and many investors would not want to invest in them. However, it is widely accepted that the securities that have high return will also have a high risk. As such, from the figure 1 and 2 below, the beta is directly proportional to the stock return, content that as the beta increases, the return on stocks will also increase and vice versa. The essence of a high return in the stocks with a higher beta is to compensate the investors for the higher risk th ey are