Statistical Analysis of Stock Indices Research Paper

Statistical Analysis of Stock Indices - Research Paper Example On the other hand, according to Pelaez (1999, 232) 'there are many ways to forecast economic series, including extrapolation, econometric models, time-series models, and leading indicator models'. For the issue under analysis in this report, the test for unit root is considered as the most appropriate tool for evaluating the given data series from the Stock indices. The methodology applied has been considered as most appropriate after a thorough consideration of the specific subject involved. A technical overview on the nuances of the unit root test is presented followed by the analysis of the Stock indices given in SPSS v14.0. This method will enable the presentation of both the theories and the practical application using reliable software to ease the process and eliminate errors. Guido (2001, 164) says that 'the composite intrinsic value measure does not appear to be an adequate measure of a stock's or portfolio's value' in his experiment to compare the US and the Australian markets. Several possible reasons are offered for this difference, including the differing market structures, the use of a different index or the use of alternate statistical tests'. In the light of the above arguments, it is clear that for the data set under analysis it is essential to use a strong statistical tool to identify the relationship between the given stock indices. Dickey-Fuller statistic tests for the unit root in the time series data. Pt is regressed against Pt-1 to test for unit root in a time series random walk model, which is given as: Pt = r Pt-1 + ut (1) If r is significantly equal to 1, then the stochastic variable Pt is said to be having unit root. A series with unit root is said to be un-stationary and does not follow random walk. There are three most popular Dickey-Fuller tests used for testing unit root in a series. The above equation can be rewritten as: D Pt = d Pt-1 + ut (2) Here d = (r - 1) and here it is tested if d is equal to zero. Pt is a random walk if d is equal to zero. It is possible that the time series could behave as a random walk with a drift. This means that the value of Pt may not center to zero and thus a constant should be added to the random walk equation. A linear trend value could also be added along with the constant to the equation, which results in a null hypothesis reflecting stationary deviations from a trend. To test the validity of market efficiency, random walk hypothesis has been tested. Unit root test has been conducted on Pt, natural log values of indices price data by running the regression equations of the following type: D Pt = d Pt-1 + ut (3) D Pt = a + d Pt-1 + ut (4) D Pt = a + dPt-1 + b t + ut (5) where, a is constant term and b is the coefficient of trend term. The null hypothesis for each is: H0: d = 0 (viii) The null hypothesis that Pt is a random walk can be rejected if calculated t is greater than the tabulated t. From the aforementioned it is clear that the test for unit root is a reliable analytical tool to test the consistency of the data series. In case of the stock market indices we are analysing, the test for unit root is a reliable tool to test the extent to which the index is speculating. The output from the autoregressive analysis for unit root test reveals that the behaviour of the stock indices it is clear that "OMXCOPENHAGEN" and "MADRIDSEGENERAL" have

Dell creates global business sales operations to better serve Coursework

Dell creates global business sales operations to better serve customers - Coursework Example Among the many companies that operate in the manufacturing sector now, the computer manufacturing companies like Dell Inc are making sizable impacts. The last few decades of the 20th century saw the emergence of sizable computer manufacturing companies, which first started manufacturing basic level Personal Computers. Now, these companies including Dell Inc. have expanded into the manufacturing of many computer related or information technology related hardware, which are having applications in the various facets of human lives. Dell Inc was established in year 1984 by Michael Dell, originally under the name of PC's Limited. When he was a student at the University of Texas, Dell started selling IBM PC-compatible computers from an off-campus dorm room at Dobie Center in Austin, Texas. The thing that made this computer different from the computers sold by other companies at that time was, it was manufactured or even assembled from various computer stock parts. Michael Dell, with the ai d of external financing and technological know-how, then started manufacturing their own computers under the name â€Å"Turbo PC†. From that initial initiative, the company grew strongly even changing the name from PC’s Limited to "Dell Computer Corporation" in 1988. Then in 2003, it re-branded to simply Dell Inc. to reflect its expansion beyond computer related products. Now, it designs, manufactures and sells personal computers, other computer and electronic related products. Although, Dell Inc. also sells products manufactured by third part manufacturers like Televisions, it directly manufactures many computer related hardware in its various manufacturing facilities located worldwide. In those manufacturing centers, Dell manufactures Desktops, Laptops, Servers, printers, ink cartridges, Mobile phones and various other IT and electronics based components, making Dell Inc. one of the top manufacturing companies of the world. Organizational Structure Dell Inc. is a pub lic limited company, as it went public in the year 1988 itself, with the selling of around 3.5 million company shares at rates of $8.50 a share. (Ireland, Hoskisson and Hitt 2008). Although, it operates as the Pubic Limited Company in majority of the operations, in key markets like India, it operates as a private limited company. That is, in United States and UK, it operates as a public company only, with the word Incorporation or Inc used in the end for US operations, while in UK, according to the United Kingdom Company Law, the abbreviation Plc is added to the company name. However, in other emerging markets like India, it operates as private entity, taking the name Dell Private India Ltd. Thus, Dell’s identity or sector depends on the market it operates. After going public only, Dell focused on large clients particularly large contracts from the government agencies, thereby expanding and diversifying its organizational structure. When the company earned good profits in the years just before 1988, Dell Inc. thought going public can help generate sizable funds, which can be further utilized to tap the opportunities available then. â€Å"In 1988, Dell after becoming public added a sales force to serve the large customers and began selling to government agencies† (Thompson et al. 2006, p.36). Headquartered in Round Rock, Texas, Dell is run by a board of directors consisting of nine people. Its founder