Business and Economic Forecasting - Essay Example

Only on StudentShare

Extract of sample
Business and Economic Forecasting

The appropriate model is estimated and a one to four step forecasting is undertaken to determine the appropriateness of the model.
We consider the price index of the Rio Tinto, the 5 day weekly stock price for the period 31st December 1999 to 31st December 2007 is used and the following chart summarizes the price index for the period.
From the above table it is evident that for the period 2000 to 2004 the price remained relatively stable deviating by small margins, however for the period 2005 to 2007 there was an increase in prices by larger margins. The following is an analysis of the Rio Tinto returns.
According to Woodridge (2006) dynamic heteroskedasticity can appear in regressions with no dynamic, in a regression if the Gauss Markov assumption holds then the estimators are BLUE (best linear unbiased estimator). However even when the homoskedasticity assumption that the error terms variance is constant across observations holds there could be still other forms of heteroskedasticity that may arise, heteroskedasticity can be tested using the white test or the Breusch pagan test. The following chart shows a case of homoskedasticity and heteroskedasticity:
From the above diagrams assuming that the 45 degree line is the fitted regression model, then the first diagram shows a case where as x increases the mean of y increases but the variance of y around its mean remains ...Show more

Summary

This paper uses Rio Tinto price index to estimate an appropriate model that can be used in forecasting future prices and returns. The maximum likelihood technique is used to estimate an appropriate model that can be used for forecasting future prices and returns…
Author : rozella42
Business and Economic Forecasting essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Business and Economic Forecasting"
with a personal 20% discount.
Grab the best paper

Related Essays

Use of Business Intelligence in Knowledge Management, Sales Forecasting or Market Research
This key business terminology has more than just one meaning associated with it. The various meanings it holds correspond to the numerous means in which it can be deployed. Each business holds this entity as its integral part without the inclusion of which it may be potentially impossible to run a business at all.
5 pages (1250 words) Essay
Business Forecasting Using eViews
The business under analysis in this report is Roll Royce and the behaviour of its share prices. The figure shown below is the index time graph. The graph uses a large amount of data and this leads to a noisy graph, but the trend of the stocks is still visible.
6 pages (1500 words) Essay
Accurate Business Forecasting
The paper aims at defining and illustrating the need of an Accurate Business forecast for a Building construction company. Broadly, it will discuss the categories that require forecasting and the ones that are of utmost importance for the success of the company.
8 pages (2000 words) Essay
Business forecasting
This enables control and management of resources better than doing in any other way. The analysis is done to analyze and identify the appropriate model of forecasting for the softwood unfilled orders forecasting. The number of unfilled
10 pages (2500 words) Essay
LOVE. - Forecasting
Generally, forecast is just a guess for future occurrences, and despite using best computer systems and best applications, the forecast can be wrong. In certain circumstances, forecast can fluctuate unusually with the market phenomenon which makes it a bad
2 pages (500 words) Essay
Weekly Reflection - Economic Forecasting Paper
The slaves provided much valued labour in plantations in north and South America. A ship sailed to Africa to acquire slaves carried a big cargo connected with mixed products, such because cotton, metal pans and also guns. Just read
2 pages (500 words) Essay
Business Forecasting
It is the management role to forecast the growth of the company so that future targets will be achieved. When estimating, the growth of the company, demand of goods and services the company offer must be compared with the cost of producing these goods and
3 pages (750 words) Essay
Economic Forecasting
r presents a time-series analysis of inflation rate in the US, assesses relationship between current and future inflation in the US, and discusses the relationship between inflation, labor force, and unemployment. The US government published on 20 November 2014 that the latest
5 pages (1250 words) Essay
Economic Forecasting
The internet is the most efficient and most reliable resources for economic data since it connect computers worldwide. With internet, one may acquire a large amount of economic data from various economies as long as it is made available. It
1 pages (250 words) Essay
Demand Forecasting
Demand forecasting for any product is paramount to any manufacturer, supplier or retailer. Future demand or forecasts will determine the exact quantities of products that should be shipped, produced or purchased. Demand forecasting is essential since the fundamental operations of production, from the manufacturer's or producers raw material stage
4 pages (1000 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT