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

Financial Modelling Report - Essay Example In addition, regression analysis will be conducted to especially find out the patterns of the regression equations and the p-value. This will help support the null hypothesis that the predictors play some role in the stock return. A number of theories will be put forward to try and explain the results of the study. MN7024-Financial Modelling Introduction Return on stock is influenced by various factors, among them including the size of a firm, book-to-market ratio, and beta. In addition, different regions of the world have exhibited different patterns in regards to stock return depending on the prevailing market conditions during a particular time (Zhang, Shu and Brenner, 2010). In this project, it will be hypothesized that return on stock is subject to the size of the firm, the book-to-market ratio as well as beta; and that different regions of the world have different impacts on the stock returns, among them including America, Asia and Europe. Owing to the strong impact that 2008 f inancial crisis caused in the financial markets especially by exacerbating market volatility; this project will also compare the variable relationships before the crisis and after the crisis with the aim of finding out whether the crisis had caused any significant changes in the stock market dynamics. The analysis will 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 regions including America, Asia and Europe. The three variables will be presented as dummy varia bles 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. Graphical representation of data Beta and stock return Beta is used in CAPM to measure systematic risk or volatility of a particular security relative to the market as a whole (Zhang, Shu and Brenner, 2010). Therefore, the securities with higher 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, meaning that as the beta increases, the return on stocks will also increase and vice versa. The essence of a higher return in the stocks with a higher beta is to compensate the investors for the higher risk they are exposed to. This relationship is not very strong where beta is very high because investors tend to accept low return from high beta considering that low beta securities require the use of leverage. From figure 2 below, the positive relationship between these two variables appears to be maintained. Figure 1: Return vs. beta before 2008 Figure 2: return vs. beta after 2008 The Book-to-market ratio versus Stock Returns Figure 3 and 4 below shows the return of stock compared with book-to-market. Studies undertaken by Fama and French (1992)

Social Security Program Essay Example | Topics and Well Written Essays - 500 words

Social Security Program - Essay Example Both the States and the Federal Government had started to distinguish that certain dangers in an inexorably industrialized economy could best be met through a social protection methodology to open welfare. That is, the contributory financing of social protection projects might guarantee that security was accessible as a matter of great with an open assistance approach whereby just those persons in need might be qualified for profits. In the United States, as in most streamlined nations, social protection first started with specialists remuneration (Mathews, 2014). A Federal law coating non military person workers of the Government in risky employments was received in 1908, and the first State recompense law to be held sacred was ordered in 1911. By 1929, specialists compensation laws were basically in everything except four States. These laws made industry answerable for the expenses of remunerating specialists. Advancement of U.S. programs has been logical and incremental, formulate d because of particular issues, and portrayed by an incredible level of decentralization (Livingston, 2008). The Office of the Chief Actuary (OCACT) arranges and coordinates a system of actuarial gauges and examines relating to the SSA-managed retirement, survivors and handicap protection programs and supplemental security pay program and to anticipated changes in these projects. Evaluates operations of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund; gauges future operations of the trust stores; behaviors investigations of project financing; performs actuarial and demographic research on social protection and related system issues; and appraisals future workloads. Provides specialized and consultative administrations to the Commissioner, the Board of Trustees of those two Trust