Description
I need help answering 10 questions regarding the complexity of banks and generally the financial markets. They must collect and organise financial data to frame a problem in the area of banking and finance and identify solutions. This will involve to show some skills in producing Figures and Tables in Excel and using EViews software. * I attached the file which has all the instructions
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ASSESSMENT BRIEFING
The Assessment
Summary: Students need to show understanding of the functions and complexity of
banks and generally the financial markets. They must collect and organise financial
data to frame a problem in the area of banking and finance and identify solutions. This
will involve students to show some skills in producing Figures and Tables in Excel. In
addition, they need to demonstrate knowledge of the different aspects of a banking
environment including bank characteristics, risk management, banking crises,
ASSESSMENT CRITERIA
The assessment criteria and weightings show you what is important in the assessment
and how marks are shared across each criterion. When you are completing your
assessment remember you need to fulfil the brief and the assessment criteria below.
Criterion
Question 1
Question 2
Question 3
Question 4
Question 5
Question 6
Question 7
Question 8
Question 9
Question 10
Total
Weighting
5%
5%
5%
5%
25%
10%
10%
10%
15%
10%
100%
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Coursework basic information
The Financial Stability Board (FSB) publishes every year the list of globally
systemically important banks (G-SIBs). You are a junior financial market analyst, and
you want to write a bank report for a job application in a multinational bank. This report
must include one of the following 10 G-SIBs.
Bank of America, BNP Paribas, Citigroup, Goldman Sachs, Deutsche bank, JP
Morgan Chase, Morgan Stanley, Royal Bank of Canada, Santander, Wells Fargo.
Use the Bloomberg to find monthly data for a chosen (only one out of ten) G-SIBs.
Then, consider the sample period from January 2000 to August 2023 and download
this series. Your task is to distribute knowledge of the evolution of your chosen bank
over the sample period.
Question 1
Produce the Figure of your chosen bank and describe the mains patterns.
[Hint: produce the Figure in Excel and then copy and paste it in your report]
Question 2
Produce the Figure of the log-returns of your chosen bank and provide a description.
[Hint: produce the Figure in Excel and then copy and paste it in your report]
Question 3
Produce the Jarque-Bera test statistic and the associated probability value of your
chosen bank based on log-returns. What is the information you gain from this test?
[Hint: compute this metric in Excel and then copy and paste it in your report. Follow
2
( −3)2
the formula: = 6 ( 2 + 4 ) rather than = 6 ( 2 + 4 ). This is because the
“kurt” function that you have to use already calculates the excess kurtosis (K-3). For
the associated probability, the JB test statistic follows a Chi-Square distribution with
2 degrees of freedom. Produce a table to show your computations]
Question 4
In order to ensure about the validity of the Jarque-Bera test statistic and the associated
probability value in Excel, you need to provide a robust check for the same metric
based on EViews. Do you observe similarities or differences?
[Hint: use the EViews software to produce this metric and then copy and paste the
produced output from EViews to your report]
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Question 5
Use a linear regression analysis, to estimate the relationship between the chosen
stock (s) and the market index (m). The form of the equation in log-returns is as follows:
, = 0 + 1 , +
(i) Give an interpretation of the coefficient estimate 1.
(ii) Test the statistical significance of the coefficient 1at the 5% level.
(iii) Calculate the correlation coefficient between the two series.
(iv) Produce heteroskedasticity and autocorrelation tests based on graphical methods
and interpret your findings.
v) Produce heteroskedasticity and autocorrelation formal statistical tests and interpret
your findings.
[Hint: Download the market index for the same monthly sample period and use the
log-returns. For the US market, employ the S&P index. For the Canadian market,
employ the TSX (Toronto Stock Exchange). For the German market, employ the DAX
index. For the French market, employ the CAC40 index. For the Spanish market,
employ the IBEX35 index. Use EViews only and then copy and paste in your report
the regression output, the correlation table and the tables/figures of the
tests/graphical methods]
Question 6
Provide an overview of three key characteristics of your chosen bank.
[Hint: a number of any three characteristics in three brief paragraphs. For example,
information about the profitability among others]
Question 7
Consider mergers and acquisitions that your chosen bank has made and how they
contributed to the banks’ performance.
[Hint: provide information for one case in one paragraph]
Question 8
Provide a detailed analysis of the performance of your chosen bank during the Great
Recession of 2008-2009.
[Hint: in one paragraph]
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Question 9
In an attempt to empirically test the impact of the Great Recession on your chosen
bank, amend your regression model by adding a Dummy variable as a second
explanatory variable to capture the Great Recession. Assume that the pre-Great
Recession holds from January 2000 to August 2008 and the post-Great Recession
from September 2008 to August 2023. Can you identify any effect from the Great
Recession by looking at the results of this new regression? The form of the equation
is as follows:
, = 0 + 1 , + 2 +
[Hint: generate a new variable in EViews (the Dummy variable) which takes two
values, 0 and 1. The value of 0 for the pre-Great Recession period and the value of 1
for the post-Great Recession period. Produce the regression output and then copy
and paste it in your report. Discuss your findings]
Question 10
Provide a detailed analysis of the position of your chosen bank in its banking industry
or sector.
[Hint: in one paragraph]
(End of Coursework)
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