Your parents are curious about the factors that may determine the market values of common stocks. They know, in a fundamental sense, the market value of a firm should reflect investors’ expectations of the firm’s future profitability. However, they notice that data on expected future profitability is non-existent but investors can use measures, such as current income, sales, assets, and debt of the firm, as variables observable now but may influence the future prospects of the firm.
Your parents have prepared the relevant accounting information of the stocks listed on the NYSE (stock exchange code = 11) and NASDAQ (stock exchange code = 14). They expect you to perform a statistical analysis for the following questions by randomly selecting 100 stocks from this stock list. It is fine if some of the variables below are missing for the firms selected in your sample.
The annual variables of the stocks they consider include:
MARKETCAP (Market Capitalization) = price per share x the number of shares outstanding
INCOME = net income of the firm
SALES = total sales of the firm
ASSETS = book value of the assets of the firm
DEBT = the amount of long-term debt held by the firm
(*All variables are in $millions.)
Prepare a professional report that addresses the following issues:
- a) Describe the characteristics of the population (population file) and the sample (the 100 firms), respectively, by presenting appropriate descriptive statistics of the variables. (Note: Using both graphical and numerical descriptive statistics). Discuss your findings.
- b) For the population (population file), examine the skewness of the distribution of MARKETCAP of the firms listed on the NYSE. Repeat this for the NASDAQ firms. Compare your results for these two groups of firms.
I should receive excel file with 2 spreadsheet one for each question and word file with written answers 150 words for each question.