Economics project questions on investments, relative income basic data and projection, stock market , comparative macroeconomic performance and liquidation of investments.
PROJECT 1: INVESTMENT
You will be investing own money in the real world. So why not start right now ? Well at least with imaginary money. That could be a helpful experience afterwards. You will be choosing 10 stocks, and will be investing 10000 dollars in each of them. Who knows your choice might turn out to be a gold mine, to the amazement of yourself. We will find about that towards the end of the Course when you will be required to sell whatever you are buying now. So don’t forget to save your work.
Try to provide Information in the following manner.
MARKET DATE ____________ refers to first Friday of the Semester. Place on the left margin.
DOW-JONES. _________ refers to Adjusted value of DOW-JONES for the MARKET DATE.
Place below MARKET DATE .
Next, construct a Table titled STOCK PORTFOLIO with Columns as under:
COLUMN 1: COUNT (e.g. 1,2,3,…up to 10)
COLUMN 2: STOCK (enter 10 stock names of your choice in alphabetical order)
COLUMN 3: BUYING PRICE (enter end of the MARKET DATE stock price; NO ROUNDING)
COLUMN 4: AMOUNT (enter 10000 against each stock)
COLUMM 5: QUANTITY (enter the result of Column (4) divided by Column (3).
Keep two digits after the decimal. Make sure to round the last digit.
For instance, if the quantity is calculated as 128.3783, enter 128.38
PROJECT 2: RELATIVE INCOME : BASIC DATA
Countries widely differ in the growth rate in per-capita real GDP. We also know that Countries growing the fastest will eventually be the richest. Now an interesting issue is how the future would look like if the recent growth pattern continues far ahead? This is what we will try to ascertain in a limited way in this Project and subsequent two Projects ( Project 3 and Project 4). Remember that in the real world, future growth rates might deviate a great deal from the current rates. So our results have to be taken with a grain of salt. Nonetheless, they might be an eye-opener. Here is how we plan to proceed.
(A) Choose two Countries from Bangladesh, Ghana, Nepal, Panama, and Sudan.
(B) Compile following information for USA, CHINA, INDIA and the two chosen Countries . (1) Per Capita GDP ( PPP ) for the latest year labeled as GDP
(2) Per Capita Real GDP growth rate for the latest period labeled as gGDP
For information on the Internet (Google ):
Enter: LIST OF COUNTRIES BY GDP ( PPP ) PER CAPITA – WIKIPEDIA for the variable GDP.
NOTE : Use International Monetary Fund (2020 ) Estimates
Enter : LIST OF COUNTRIES BY GDP ( REAL ) PER CAPITA RATE- WIKIPEDIA for the variable gGDP. NOTE : Use figures under the Column 2010-2018 annual growth
(C) Now Enter gathered information in EXCEL following the format indicated below
cell A1 enter COUNTRY
cell B1 through F1 enter Country names : USA in B1, China in C1, India in D1, and next your two chosen Countries in E1 and F1.
cell A2 enter GDP
cell B2 through F2 : enter GDP figures for corresponding Countries .
cell A3 enter gGDP
cell B3 through F3 enter gGDP figures for corresponding Countries. When you enter the figures, eliminate the percentage sign %.
PROJECT 3 : RELATIVE INCOME : PROJECTION
Continue from PROJECT 2.
row 5 leave Blank
cell A6 enter YEAR
cell B6 through F7, leave Blank.
cell A7 enter 0
cell B7 enter GDPp ( per capita GDP ) of USA
cell C7 through F7 : enter per capita GDP figures of corresponding Countries, as for instance, that of China in C7, and India in D7.
cell A8 : write the equation =A8+1 then click Enter, next drag it up to the number 50
cell B8 through F8: This time we will have to input the actual values of B4, C4, D4 and so on in corresponding Equations. Let us illustrate with hypothetical numbers. Let B4 equals .015, and C4 .085. Now
cell B8 =B7*(1+.015) and then click Enter
cell C8 =C7*(1+.085) and then click Enter
cell B9 through F9 : Again we will have to input actual values of B4, C4, D4 and so in the corresponding equations.
Cell B9 = B8*(1+.015) click enter and next drag up to the year 50
Cell C9 = C8*(1+.085) click enter and next drag up to the year 50
ROW 58 leave blank
cell A59 enter INITIAL
cell B59 leave blank
cell C59 through F59. Here our objective is to ascertain what was each country’s per capita GDP as percent of that of USA in the initial year. Therefore,
cell C59 Enter the Equation =(C7/B7)*100
cell D59 Enter the Equation =(D7/B7)*100 and so on.
cell A60 enter TERMINAL
cell C60 through cell F60. This time we would like to find out what would be each country’s per capita GDP as percent of that of USA in the terminal year .
cell C60 Enter the Equation =(C57/B57)*100
cell D60 Enter the Equation =(D57/B57)*100 ; and so on.
When you submit PROJECT 3, make sure that you have attached PROJECT 2 as well.
PROJECT 4: RELATIVE INCOME PROJECTION: REPORT.
Attach PROJECT 3.
Write a report based on your findings in Project 3. Make sure that it is interesting to read. As you know, figures corresponding to the Row INITIAL gives each Country’s per capita GDP as percentage of USA in the starting year, while that of TERMINAL A gives each Country’s per capita GDP as percentage of USA for the final year. TERMINAL B figures refer to each Country’s per capita GDP as percentage of USA, again for the final year, given that USA income grows at a higher rate assumed by you under USA 2.
Tell us about relative USA position now, and how it might look some 50 years ahead. Could it be that some Countries might overtake USA? Who are they, and in how many years? How rich they will be compared to us?
Project 5: STOCK MARKET DIARY.
We have studied how a Market does function. We have also noticed that prices do not remain fixed. They move in response to changes in supply and demand. Response of price to unfolding events and expectations is extremely rapid in the market for financial assets like stocks. Our main task is to identify news items that might have impacted the Stock market in a particular day. We will use
Dow-Jones Industrial Average, commonly referred to as Dow-Jones or simply Dow, as representative of the Stock Market.
Now proceed as follows:
Choose a week within the Semester.
Collect information on Dow-Jones Industrial Average ( Dow, Dow-Jones) for each working day of the week you have chosen .
Present data in a TABLE titled MOVEMENTS IN DOW-JONES DURING THE WEEK as under Change over Change in
Date Close the Day percentage
Next, indicate separately for each working day of the week, what specific economic events or news might have caused the Dow-Jones to move the way it did. Write a short but informative paragraph for each working day. You will find required data for the Table as well as needed information for your writing in Business Pages of the Philadelphia Inquirer. You may consult other sources like Wall Street Journal for extra credit; in case you have done so, don’t forget to identify the source.
Project 6: COMPARATIVE MACROECONOMIC PERFORMANCE
Choose a Country from France, Germany, Italy, and UK.
Present information for the latest available year as outlined in Table 1 below. Write the name of the Country of your Choice in the Column labeled ( Choice ). For data go to WORLD FACT BOOK the same way as in PROJECT 2. Look for relevant information under ECONOMY Section of the Country.
TABLE 1 COMPARATIVE MACROECONOMIC DATA
( all figures are in percent)
Particulars USA Canada Japan Russia (Choice)
Growth rate in real GDP
Project 7: REPORT ON COMPARATIVE MACROECONOMIC PERFORMANCE
Now write a report in as much detail as you can comparing macroeconomic performance of USA with other rich Countries based on PROJECT 6 information. Make your narrative interesting and easy to read for an ordinary person. Enrich with your own observations for extra credit.
Project 8: STOCK MARKET DIARY.
Same as Project 5 but for a different week within the Semester.
Project 9 : LIQUIDATION OF INVESTMENTS
You have bought stocks earlier (PROJECT 1).Now you will be selling your holdings. Construct a Table captioned LIQUIDATION OF HOLDINGS as below :
COLUMN 1: Same as COLUMN 1 of PROJECT 1
COLUMN 2: Same as COLUMN 2 of PROJECT 1
COLUMN 3: Same as COLUMN 5 of PROJECT 1
COLUMN 4 SELLING PRICE. Enter price as on last working day of the 12th week of the semester .
COLUMN 5: PROCEEDS Enter the result of COLUMN 3 multiplied by COLUMN 4. Add up all the values and write down the Total figure at the end of the Column.
COLUMN 6: GAIN OR LOSS
IN PERCENTAGE Calculated as: (each COLUMN 5 figure minus 10,000) divided by 100. Add up all the values and next divide by 10. Enter this figure as Column TOTAL.
Project 10 : ASSESSMENT OF INVESTMENT PERFORMANCE
Now that you have liquidated your holdings, it is time to assess how well you have done as an investor.
Construct another Table titled RELATIVE MOVEMENT IN DOW-JONES as below :
Date Value Change percentage
Column 1 Column 2 Column 3 Column 4
Under Column 2 enter corresponding Dow-Jones figures as in Project 1 and further in Project 9. In Column 3 enter the result of Dow-Jones Project 9 minus Dow-Jones Project 1. In Column 4 enter the result of ( Column 3 divided by Dow-Jones Project 1 ) * 100. You have made money if the Total under COLUMN 6 in Project 9 is positive. But that is not enough. You have to compare your performance with that of the Market. Your performance will be rated as outstanding if you can beat the market, that is to say COLUMN 4 figure of the above Table is lower than the Total under COLUMN 6 in Project 9.