Federal Open Market Committee (FOMC) Meeting and Trading Strategy
The FOMC holds eight regularly scheduled meetings per year. At these meetings, the Committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.
After each meeting, the committee releases statements. Please extract useful information from the statements released on March 21th, 2018 and May 2nd, 2018 and incorporate real-world events to design a trading strategy. Your strategy should include maximum 3 stocks.
Please submit one report to explain the reasons behind your strategy. Please list the stocks you choose and reasons why you choose them. The report should be 1-2 pages. If your strategy includes more than one stock, please also provide portfolio weights on each stock.
Please also submit an Excel file. In this Excel file, you should use daily stock price data from Yahoo Finance to calculate the daily returns of your strategy over the window from March 22th to May 10th and plot the daily returns. Please also compute the average annual return, annualized volatility, and the sharp ratio of your strategy based on the daily returns.
The final projects will be evaluated based on the reasons why you choose the strategies and the calculations in the Excel file. The final projects will not be evaluated based on the performance of your strategies.