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Financial Modelling Report - Essay Example
Finance & Accounting
Pages 8 (2008 words)
MN7024-Financial Modelling [University] [Instructor Name] Executive summary This project is aimed at establishing whether there is any relationship between stock return on one hand, and beta, book-to-market ratio, size of firm, as well as different regions of the world on the other hand…
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 financial 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. ...
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