Using an appropriate 'factor model', assess (a) the performance of the management in creating value for shareholders and (b) the extent of the foreign exchange exposure of a FTSE100 company of your choice.
The following - while not intended to be entirely prescriptive - is intended to give you some idea of what your assignment should include.
- An introduction that states the goals of your project - what are you setting out to explain? - and mentions any relevant literature (please do not include a long literature review, keep it focused and concise!).
- An explanation of the specification of your model.
o Why did you choose these particular independent variables?
o Why these particular functional forms?
o What a priori hypotheses do you have?
o What are the expected signs according to the underlying theory, etc?
o A short description identifying data sources and any problems with these data.
- Your results. (If you test a number of specifications, be sure to identify which you see as the best of these.)
o An analysis of the results that includes a discussion of econometric problems encountered and tests that you have undertaken. The main results should be tabulated as done in academic research papers.
o What is the significance of the results and how do they relate to the original questions posed in the introduction?
o Are they consistent with the theory?
o Is the model statistically adequate in representing the data?
- A short summary & conclusions that includes your major findings and suggestions for further research.
- A (short!) bibliography
- An appendix which includes all regression runs and all relevant output. (In the case of very extensive listings, you may choose to supply these electronically.)