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Using gretal express express the characteristic line of modern investment analysis from the CAPM , 2 MONTH BEFORE the 2008 financial crisis and 2 months after it. Using the time series Daily dow jones industrial average,risk free benchmark(3month treasur - Essay Example

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Descriptive statistics involves the analysis of data that helps describe, show and summarize data in a meaningful way that patterns may emerge from the data. In 2008 the world economy faced its most dangerous crisis. Dow Jones Industrial Average in the United States lost 33.85…
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Using gretal express express the characteristic line of modern investment analysis from the CAPM , 2 MONTH BEFORE the 2008 financial crisis and 2 months after it. Using the time series Daily dow jones industrial average,risk free benchmark(3month treasur
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Extract of sample "Using gretal express express the characteristic line of modern investment analysis from the CAPM , 2 MONTH BEFORE the 2008 financial crisis and 2 months after it. Using the time series Daily dow jones industrial average,risk free benchmark(3month treasur"

Download file to see previous pages Below is the data collected on the Dow Jones market based on the CAPM 2 month analysis before the 2008 crash, and 2 months after the 2008 crash based on time series data for daily Dow Jones industrial average, and the interest rates.
With reference to the descriptive statistics, the location and dispersion were taken into considerations in analyzing the Dow Jones statistics before and after the 2008 crisis. Before the crisis we realize that Dow jones was operating at a relatively has a relatively higher average return and lower risk when compared to after the 2008 crisis which has a lower average return than it and a higher risk rate. Therefore before the 2008 crisis, Don Jones had a better market to invest in based on its lower risks rate.
Financially investors who seek incomes have several alternatives to choose from that can offer superior payouts with minimal risk rates. It is thus vital to know that there is nothing like risk-free investment but that different investments carry different types of risk. With reference to the data descriptive analysis above and based on the risk investment returns.
Basing on the regression summary (at 70 % and 30% confidence interval) below, it is observed that the intercept on the before the 2008 crisis is statistically significant while the excess return on the after the crisis is not statistically significant. This is because the p value of the before the crisis excess return is greater than 0.05 while that of the intercept is less than 0.05. Therefore, this equation or model can’t be used in forecasting the Dow Jones excess returns using the after crisis statistics. The excess returns falls between 0.10846 and 0.2925 at 70% confidence level. The R squared is small and it could be due to the Dow Jones excess return is influenced by the factor of the crisis. When the regression analysis is ...Download file to see next pagesRead More
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