The Dynamic Behavior Of Daily Returns Of Microsoft Stock Price

15 In testing the hypotheses: H0 β1 ’ 0: vs. H1: β 1 ≠ 0 , the following statistics are available: n = 10, b0 = 1.8, b1 = 2.45, and Sb1= 1.20. The value of the test statistic is:

To avoid spurious results, unit root tests using Augmented Dickey-Fuller (ADF) (Dickey and Fuller, 1981) and Philips-Perron (PP) are performed to determine the time-series properties of the variables employed in the analysis. Two or more variables are said to be co-integrated when they exhibit long run equilibrium (relationship) if they share common trend(s).Therefore Auto-regressive distributed lag bounds approach (ARDL) is used to test it. The choice is based on several

The three-year SAIC stock price data and its corresponding SSE index are obtained from finance.yahoo.com, as it provides dividend-adjusted closing prices. The two data are ordered in time in Excel (Sort Ascending). It is found that 46 SAIC daily stock prices are missing due to suspension of trading, therefore; 46 corresponding SSE daily index are removed in order to match up dates on the two data series.

Microsoft Corporation is an American global technology firm develops, manufactures, and sells computer software, electronics, and personal computers. The firm has its headquarters in Redmond, Washington. Bill Gates founded the corporation in 1975 to develop and sell necessary interpreters; it rose with time to become the dominant player in the computer operating system operating system it had its initial public offer (IPO) IN 1986. Its fast growth in the industry has enabled it to acquire Skype technologies in 2011 at the cost of $8.5 billion. The firm has plans to make more acquisitions this year. The profit margin of the company lies at US$16.79 billion.

This report is issued in order to inform the public about Microsoft Corporation. We analyzed the profitability and liquidity of this company. In addition, we were able to provide recommendations for investments or credits in Microsoft for the best interest of the public.

Microsoft is a highly diversified company. Its technologically-related products span from software to music players to game consoles to web browsers to search engines to phones. However, its flagship product, the product which has been the primary driver of its profits has been Microsoft Windows, the ubiquitous operating system that runs on virtually every computer in the world. Windows has been deemed so critical that even Microsoft's competitor Apple was effectively forced by market pressures to allow its Macs to run Windows, in an effort to boost sales. "As astounding as Apple's success has been, it hasn't put a dent in the Microsoft Office monopoly. [Current CEO] Ballmer and company still profit on every Macbook running Word, Excel and PowerPoint" (Greg 2012).But while Microsoft continues to make its highly profitable Windows products (despite industry criticism about its user features); it has struggled to diversify in its many critical areas, most notable in its music, phones, and Internet service.

For d1, t-statistic=- 2.5334, t-statistic > t-critical. Thus we reject Ho and d1 is significant.

Microsoft are situated within the top 20 largest companies functioning in the world, with turnover figures of 60-70 billion dollars a year (E-how, 2011).

In the first week, the stock maintained its stability through the first 4 days but ended up taking a small dip on the last day of the week, which dropped the stock price from $118.69 to $116.40. In the second week, the stock dropped when the market opened back up then stabilized for the rest of the week. The stock price went from $116.40 to $112.88. In the third week, the stock increased considerably from the previous week when the market opened back up and was stable. The price was stable throughout the week until the last day of the week when the price of the stock ended up fallen. The stock price went from $112.88 to $112.40. In the fourth week, the stock market opened back up. The price of the stock had went down but increased dramatically and ended up rising back to its original price. The stock price went from $112.40 to $114.16. In the fifth week, the stock increased considerably. When the market opened back up, the stock price was slow and steady on the first day and then started increased throughout the rest of the week almost reaching back to the purchasing price. The stock price went from $114.16 to $117.20.

Microsoft became the global leader of software services and internet technologies for the computing industry in the early 90’s. It provides wide range of products & services and is involved in developing manufacturing, licensing and supporting software support. Microsoft’s software product includes operating system, business solution aps, computer and server applications as well as software development tools. Microsoft offers different range of services from its five

Using the statistical tables in your textbook, find the values of the appropriate test statistic in the following two situations:

First of all, variables should be given in log levels in order to alleviate the problem of serial correlation and the elasticity of the coefficients. The results of ADF unit root test in levels concludes that all three variables - seasonally

It should be emphasized, however, that because of inability of the DF-GLS to capture the possibility of a structural break, the power of the test is likely to decrease with an undetected structural break in the series, thereby providing misleading results. For completeness, therefore, we investigate unit roots in the presence of a structural break using the Perron-Vogelsang (PV) test. The results of the PV test are summarized in Panel B of Table 1. As seen in the DF-GLS test, the null cannot (can) be rejected for all the levels (first differences) of the variables, confirming that all the three variables are I(1) series. Hence, it is certain that the underlying series are apparently all I(1) processes even after taking into account a structural break in the series,

The research data was analyzed using a statistical software called STATA. Before running the data for the regression analysis, panel unit-root test was performed to see if data is stationary over time so that it can be used in estimating the variables in question. The value of the variables in the model throughout the research period is not constant; that means, there are some periods where there are spikes. These periods of ups and downs in value of economic variables are called shock in economic jargon. The notion behind testing for stationarity is to identify whether the effect of such shocks is permanent or transitory. If the effect of such shocks is temporary, the subsequent values of the variables will return to their long term equilibrium suggesting that the data is stable even with the presence of shocks.

The critical value according to Narayan (2005) (Case III: Unrestricted intercept and on trend) No trend, K = 5, (***), (**), (*) denotes Significant at 1%, 5% and 10% respectively.