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Unformatted text preview: intentionally a little vague to allow for more open ended answers. You can use any of the concepts or tools we have learned so far to predict current returns. Imagine that you are working for an investment firm and that you have been asked to give advice to a senior manager who is not statistically oriented. In other words, the manager is interested in substantive advice rather than you showing off your knowledge of statistics. The file “Two Stocks.wf1” has daily data on the closing price of IBM stock (adjusted for stock splits) in the series named “IBM”, and Citigroup closing stock prices in the series “CITIGROUP”. Also included in the data is the S&P 500 in series “SP500”, and the 3 month treasury bill rate in series “TB3”. You may assume that the daily return on a stock is defined as ± ² ³´µ ¶ ± · ³´µ ¶ ±¸¹ ....
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This note was uploaded on 12/26/2011 for the course ECON 140a taught by Professor Staff during the Fall '08 term at UCSB.
- Fall '08