Lessons LearnedLessons LearnedDiscover 101 -DDiscover 101 -DLessons LearnedLessons LearnedDiscover 101 -DDiscover 101 -D

Theresia WansiTheresia Wansi

1/08/091/08/09

Outline•Discuss Projects•Lessons learned

Two Projects1. Tracking the Stock Market Performance

2. Research Methodology- investigate relationships between

variables.

Who Is Dow Jones???

How is the Performance of the Stock Market?

• Monitor 3 main Indexes:– Dow Jones– S&P500 – Nasdaq

• Main Web site for data used is:• www.yahoofinance.com• The attached excel file is the six

weeks summary from Michael Quick, a student in the class.

Lessons Learned• Good project if done for a short time.• Boring if done all through the semester .

Solution• Limit project to Two Months• Have groups track different

indexes and discuss results.

Econometric methodologyEconometric methodology

Exploring Relationship Exploring Relationship between Variablesbetween Variables

Econometric methodologyEconometric methodology

Exploring Relationship Exploring Relationship between Variablesbetween Variables

Bobbie C., Mike S., Casey T.Bobbie C., Mike S., Casey T.

Econometric Methodology

– Define Research Question– Observe /gather Facts– Formula : y = b1 + b2 (x) + e– Estimate Parameters using Regression

Analysis– Test Hypothesis– Use information to predict future outcomes

Step 1 : Define Question

• How is GPA affected by the amount of study hours?

Estimating Parameters by Bobbie C., Mike S., Casey T

Regression Statistics  

Multiple R 0.987

R Square 0.975

Adjusted R Square 0.974

Standard Error 0.124

Observations 19.000

 

ANOVA

  df SS MS FSignifican

ce F

Regression 1.000 10.15210.15

2665.26

4 0.000

Residual 17.000 0.259 0.015   

Total 18.000 10.412     

 

  CoefficientsStandard

Error t Stat P-valueLower 95%

Upper 95%

Lower 95.0%

Upper 95.0%

Intercept 1.601 0.05927.35

6 0.000 1.477 1.724 1.477 1.724

Study Hours (slope) 0.122 0.00525.79

3 0.000 0.112 0.132 0.112 0.132

The Meaning of the Output

by Bobbie C., Mike S., Casey T

• B1: The Intercept

– This number is the LOWEST possible GPA• If Study Hours were zero

• B2: The Slope

– This number represents by how much your GPA will increase for each hour you study.

• So the lowest possible GPA is 1.601 and for each hour you study, your GPA will increase by .122

Intercept: 1.601Study Hours (slope): 0.122

Step 5: Using information to predict future outcomes

by Bobbie C., Mike S., Casey T

GPA = 1.601(b1) + 1.222(b2) * study hours

B1: B2: Study Hours: GPA:

1.601 0.122 0 1.60

1.601 0.122 10 2.82

1.601 0.122 20 4.04

1.601 0.122 30 5.25

1.601 0.122 40 6.47

Lessons Learned• KIS = Keep It Simple.

– Explore simple relationships• E.g Price & Quantity Demanded• Income versus Expenditure

– Omit Hypothesis Testing• Too much for freshmen

• Include primary data from MM students .• Having a Mentor in your field is helpful.

Questions???