Investment Project

    Write an investment blog to answer a finance question that interests you (you can decide whether and where to post it later). The report should be 1‐2 pages plus some python data analysis. Use the tools we learned to access, visualize and analyze data to provide answers to your question and communicate your answers to readers. For the blog/report, try to cover the following points: 1. Motivate your question and provide some background information ‐ why is the question important/interesting. 2. Your test design – how do you want to test your question. 3. Get data – discuss sample selection – is the sample representative of the population. If not, discuss the limitations. 4. Calculate and discuss descriptive statistics, visualize the data – what do you learn from this exercise. 5. Form and state test hypothesis. 6. Test your hypothesis – discuss the proper test statistic and significance level. 7. Interpret your findings and conclude – discuss both statistical and economic significance. 8. Prepare a 5‐10 minutes presentation (ppt will be helpful) to the class. Please keep your discussion concise and to the point. Here are some possible topics. Feel free to explore other questions. 1. Evaluate the risk and return characteristics of a stock, write a stock report based on analyzing historical data 2. Effect of diversification 3. Time diversification 4. Global diversification 5. Cryptocurrency investment 6. Real estate investment 7. Test a trading strategy For the final project, the best strategy is to continue with your midterm project. You can include more analysis, for example, regression, portfolio sorting, event study, and simulation to further address the question of your interest. Please keep the final project in mind while you select the topic for the midterm project. Here are some possible topics for the final project. Here are some possible topics for the final project. Feel free to explore other questions. 1. Evaluate the risk and return characteristics of a stock, write a stock report based on analyzing historical data. Use both CAPM and multifactor models to evaluate stock performance and risk. 2. Analyze the performance of international stocks. Use international multi‐factor models. 3. Testing a trading strategy (for example test whether the momentum or other strategies work in your sample period) 4. Testing for seasonality, for example, January effect, holiday effect, weekday effect. 5. Use Monte Carlo simulation to assess the risk of a project or an investment. 6. What affects stock prices/returns? Form a testable hypothesis and test it formally. (In the past, researchers have studied the relation between stock returns and firm fundamental variables, macroeconomic variables, investor sentiment, weather, etc.) 7. Evaluate the performance of mutual funds. Study their risk and return based on analyzing historical data. Use both CAPM and multifactor models to evaluate fund performance and risk. 8. Test whether there is hot hands among fund managers. Does past performance predict future performance? 9. Compare the performance of actively managed funds and passively managed funds. Based on your findings, which one is a better investment vehicle. 10. Perform an event study to see how some announcements affect stock returns, for example, M&A, earnings announcements.