Paper, Order, or Assignment Requirements
The tittle of the paper is as follows:
Testing the forward premium puzzle in foreign markets.
The research paper should be divided like so:
• Abstract (roughly one page)
1. Introduction: the introduction is extremely essential where it gives the reader important and necessary information about the topic and in the last paragraph of the introduction, it should have information where it gives the reader an idea of what comes next until the very end of the paper. Meaning to know how’s the structure of the paper and what points come in next.
2. Methodology: It should contain the methodology that has been tested. Using or following the test equation which is:
Δst+1 = st+1 – st = α1 + β1(ft –st) + σ
And from that formula, we need to be able to drive the following formulas:
α = Rp – [Rf + (Rm – Rf) β]
• Standard Deviation
• In each of the formula, it needs to be explained what does each variable denotes.
• Null Hypothesis formula
3. Data & its properties: I’ll be providing you with files that contain data, where I was provided with those data from my instructor. Those data are the basis of the test. You will be able to see 6 graphs and a few tables, each one should be explained, what does it mean and how was it derived, then apply the testing formula to it.
In data & its properties, it should only include the tables that have the mean and the standard deviation for each of the following currencies (Canadian Dollar, Japanese Yen, Swiss Franc), in addition to that, it has be explained. Meaning underneath the table, there should this Note: and elaboration. In addition, the graphs that are provided should be put in this section, each in a separate page with its own explanation underneath just like how the tables were explained. (*Note: the explanation of it)
4. Empirical results: It should contain the second table (Beta and Alpha) with their numbers for each of the following currencies (Canadian Dollar, Japanese Yen, Swiss Franc), and explain each of those currencies and what their figures mean. Indicate whether beta is positive or negative for each of those currencies and for example you can say that the swiss franc is more severe than others and so on …
5. Conclusion: Roughly 2-4 paragraphs.
6. References: References should be listed alphabetically.
Please note that I would like you to recreate the tables and adjust them accordingly to how I specified them. They should be as if they are to be submitted to a journal.