We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Quantitative method for finance - Essay Example

Comments (0) Cite this document
Since Xt and Yt ­ are two random walk series, regressing Yt on Xt using a simple linear regression should yield a insignificant coefficient of Xt and a very low R-squared reflecting very bad fit. But if the regression is carried out, it will be found that the coefficient is…
Download full paperFile format: .doc, available for editing
Polish This Essay94.7% of users find it useful
Quantitative method for finance
Read TextPreview

Extract of sample
"Quantitative method for finance"

Download file to see previous pages 2. Probability models are models that become relevant when the outcome of interest is not continuous (such as wages per week or stock prices) but rather binary in nature such as, work/not work, survive/not survive etc. In such cases, the simplest possible methodology adoptable is that of the linear probability model or LPM. The response variable of interest, say Y takes the values 0 and 1 only and the approach is to model the expected value of this variable as a linear function of the independent predictor variables X:
(ii) The variance of y will be dependent on x. That is, the model will suffer from conditional heteroscedasticity. This violates the homoscedasticity assumption of OLS. Thus, even though estimates will still be unbiased, the OLS estimator will not be efficient and the estimated standard error will be biased.
(iii) The error terms are also binary. They can only take the values of or and thus cannot be normally distributed. Therefore, the assumption of normality of errors is also violated and this in turn would imply problems for typical inferential procedures.
(iv) Finally, due to the binary nature of the dependent variable, diminishing returns cannot hold. Therefore, the functional form restricts the possibility of obtaining diminishing marginal impacts of the independent variable on the dependent variable.
3. (i) If the condition does not hold, then applying OLS is no longer optimum. The assumption implies the error covariances are zero. This is necessary for OLS estimates to have the “Best, Linear, Unbiased” properties. If the error covariances are not zero, then the assumption of the Gauss-Markov theorem are not satisfied and thus, the OLS estimates are no longer best, although they are still unbiased and consistent. The main problem arises in the context of inferences.
4. (i) If then the series is said to have a unit root. This implies that the series is non-stationary. This essentially translates to the mean and ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Quantitative method for finance Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.org/statistics/1595228-quantitative-method-for-finance
(Quantitative Method for Finance Essay Example | Topics and Well Written Essays - 1000 Words)
“Quantitative Method for Finance Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/statistics/1595228-quantitative-method-for-finance.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
The quantitative questionnaire method versus the qualitative focus group method
The reason for this is that one of these, i.e. questionnaire brings out just numbers and information while the focus group methodology aims to explore how and why these numbers or information sets have come up from and what are the exact reasons behind the very same.
6 Pages(1500 words)Essay
Quantitative Methods for Finance
Real prices on the other hand are computed from the nominal prices by adjusting for changes in the price level. The standard way to do this is to take the prices of some particular year as the base year price (=100) and express the prices of all products in all years using this list of base year prices.
4 Pages(1000 words)Essay
Quantitative Easing
Name Institution Course Instructor Date Quantitative Easing Stimulating the economy of a country requires unconventional measures that involve monetary policies such as quantitative easing. In such a case, a country’s central bank purchases financial assets from banks and any other private sector business with new electronically created money in order to inject a pre-determined amount of money in the economy of the country (Mayer, 2010:266).
6 Pages(1500 words)Essay
Quantitative Method
Harvey (2002) describes quantitative data as data which can be sorted, classified, measured in a strictly "objective" way - they are capable of being accurately described by a set of rules or formulae or strict procedures which then make their definition (if not always their interpretation) unambiguous and independent of individual judgments.
12 Pages(3000 words)Research Paper
Quantitative Analysis for Finance
The outcomes predicted by SPSS, find that every pair of tourist revenue variables, i.e., (REVFRANH, REVFRANB), (REVFRANB, REVGERMB)
4 Pages(1000 words)Essay
Project Quantitative Method
and should have been in operation for the last five years. The sampling procedure for this study will be the simple random sampling. Hospitals will be identified across the country and numbered. They will be then categorised according to
2 Pages(500 words)Essay
Quantitative finance
This drastic growth has been driven by advanced economies. These developments are also common in developing countries and the emerging markets, which have since become more financially
10 Pages(2500 words)Essay
Quantitative Applications in Finance
However there are a few values consistent with tbe null hypothesis. We observe that p-value for the two-tailed test is less than the level of significance, therefore we reject the null hypothesis and
9 Pages(2250 words)Essay
Advanced applied quantitative methods in finance
These models are important in the estimation of time-varying volatility. Time varying volatility refers to fluctuations or variations in volatility over time. Financial instruments and other stocks exhibit periods of low and high volatility at different points in time.
13 Pages(3250 words)Essay
Research Method
The main motive of the production manager is to conduct a research to properly analyse the reasons behind this low performance rate of workforce. The research purpose will include the assessment of employee’s skills and
6 Pages(1500 words)Essay
Let us find you another Essay on topic Quantitative method for finance for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us