ECON2000 – Money Markets and Democracy Assignment

Assignment Task

Objective

The aim of the assignment is to show your ability to carry out a research project that meets normal undergraduate Honours degree standards as specified in the Ontario Qualifications Framework.

Research Topics

1. Equity Market Investment Strategies: Empirically, on equity markets, momentum strategies outperform value strategies. Discuss.

2. Stocks or Bonds? Two conventional investing principles are:

(i) stock and bond markets are alternatives - when the stock market turns down, move into bonds and vice versa

(ii) the stock market outperforms over the long run but with higher volatility. Do these these two rules make logical sense and are they well supported by the data or not?

3. Does Behavioural Finance make money? Starting in the early 1990s, some proponents of behavioral finance (e.g. Richard Thaler) have set up investment management firms that claim to run clients’ money using the “principles of behavioral finance”. How have behavioural finance strategies performed on average compared to conventional investment strategies and why?

4. Managed Futures: Even though a considerable number of the wealthiest traders seem to have made their money from the futures markets, managed futures funds tend to underperform equity funds. Discuss.

5. Robo-advisors: In the last few years thing called “robo-advisors” have sprung up. They offer to manage clients’ money using “advanced AI techniques”. What are these techniques and how have they performed when compared to a naive and inexpensive strategy of buying and holding some appropriate index-tracking ETF?

Alternative Topic

If you prefer a practical exercise rather than a research project, you may choose the following topic. Obviously several of the instructions and rules for the Research Project do not apply to this simulation exercise

1. Practical Trading Exercise: Open an online demonstration stock market trading account has a free online simulator; a free practice account at your bank’s discount brokerage - e.g. Scotia Trade – would be even more realistic or FX/commodities demo account (fxTradePractice at ). Your goal is to try to make money in the simulated trading environment over at least a 7 week period. When you buy or sell, make notes in your trading log about the reasons for your decision, economic and market events at the time etc. Your justification for making each buy/sell decision must demonstrate your ability to apply principles learned

In the course. The goal is to learn about how economic and political events effect financial markets and the practical challenges posed by market “efficiency”. Record those ideas in your trading log as well. Your assignment report must include:

1. A copy of your Trading Log (the notes you keep about the reasons you decided to make each buy/sell trade).

2. A printout of your Transaction Log (all activity in your trading account) from the trading website

3. A summary table showing the profit/loss for each position taken, and

4. Your final assessment explaining what you learned during the exercise including an analysis of the economic and political developments that affected your results.

This ECON2000 – Economics has been solved by our PHD Experts at My Uni Paper.