Work to Do:
1. Your task requires the analysis of one minor stock market versus one Major Stock Market; therefore you have to select the markets that you wish to study. Once this is done, you have to get the exchange rates vs. hard and soft currencies (be sure to include domestic currencies in your project).
2. Once you have decided which countries are going to be under analysis, your next step would consist in gathering enough evidence analyzing the relationship between Stock Markets and Currency Markets.
3. When your econometric techniques have been identified and understood. Your group should write a detailed report addressing the following issues: a) Describe your data and methodology. You should provide a detailed explanation of the data source, time period under analysis, and basic econometric test to be applied. b) Discuss your main findings. c) Conclude your report, highlighting the importance of your results and what have you learnt in these section.
1. The second part of your project consists in conducting a Volatility analysis using an appropriate model (check your Econometric class notes) between the stock markets and exchange rates selected. Before implementing your test, you should provide clear explanations and discussion on the selected techniques, their relevance and how do you intend to use them.
2. You will conclude your research looking at contagion effects between equity and currency markets and providing relevant conclusions that link your report major findings. N.B: Econometrics techniques would be explained during lectures. Labs are designed to help you out with your methodology. EVIEWS must be used to support your econometric modeling. Questions related to your own projects would be dealt during tutorials. Your referencing should be in line with the Harvard referencing style (intext and list of references)
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