March 13, 2021

Assignment # 1
BA3614 Business Analysis and Forecasting
BBA-6 (B)
Ms. Riffat Mughal
Individual Assignment
Submission Date: March 24, 2020 Total Marks: 10
Objective of the Assignment: To familiarize students with an understanding of the fundamentals of
forecasting and its applications in the economic and business environment. To use Naiive approach, Bry-
Broschan-Pagan-Harding BC (BBQ) dating algorithm and OLS regression for prediction, compute some
basic formulas and interpret.
Learning Outcomes: Students must demonstrate understanding of the basic concepts and purpose of
business analysis and forecasting. Also, students must demonstrate the ability to compute and interpret
some basic concepts to make business decisions.
Assignment Details: Please submit MS Word and Excel files of your assignment. You should solve all the
three questions in MS Excel and do analysis in MS Word file. Please also provide your name, registration
number, course name, class, and section in the assignment.

Data: For this assignment, you can download data of following variables from the respective sources:
1. Economic Variables (Such as GDP, GNP, Consumption, Government Expenditures, Imports,
Exports, Foreign Direct Investment) from World Bank Data website
2. Stock Prices (Yahoo Finance or Pakistan Stock Exchange)
3. Exchange Rates (SBP Exchange Rate)

Each person must choose a different economic variable, stock index, stock, and exchange rate. The annual
data should be for the period 1991 to 2020. The choice will be on a first-come, first-served basis. The
choices are discussed below:
1. If you have selected Economic variables like GDP or GNP, please use BBQ Excel file and complete
following table:
Length of Recessions and Expansions
1991-2000 2001-2010 2011-2020
Year of Months Months Year Months Months Year Months Months
Peak to from of to from of to from
Trough Trough Peak Trough Trough Peak Trough Trough
to Peak to Peak to Peak

Average

Note: You have to select any one country. For reference, please see Chapter 3, page # 39, and table
3.3.

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2. Stock prices - Forecast the price of a stock, or a stock index using Naiive approach. Compute and
interpret the Error, Absolute Error, Squared Error, MAD, MSE, MPE and MAPE. Draw a line
graph of the model actual, predicted and error values. The daily data should be for the period
January 2015 to December 31, 2020.

3. Exchange rates - Forecast the exchange rate for any country. The daily data should be for the period
January 2020 to February 28, 2021. Use your data and a spreadsheet program to forecast the value
for your variable for March 2021. You should apply linear trend like OLS regression. Comment
on the strength of the approach in terms of statistical measures such as the R2, F-test, t-tests, p-
value etc.

Please upload the soft copies of your analysis along with supporting spreadsheets (input and output files)
by Wednesday, March 24, 2021. Also, submit the hard copy of your assignment and keep all the data tables
and result tables in Appendix. It should be typed on 8 ½ x 11 or A4 paper. Please do not submit the report
in a special report cover; a staple in the upper left-hand corner would be adequate.

Word Count: 750 – 1000 words

Plagiarism: SZABIST has a very strong culture of academic integrity, and zero tolerance for plagiarism is
an integral part of this policy. Any student who commits plagiarism will be awarded an ‘F’ grade in the
course. Please read SZABIST plagiarism policy.
The assignment shall be put to plagiarism check. The maximum similarity is below 18% for the whole
assignment and less than 5% from a single source. The plagiarism report shall be attached with the
assignment at the time of submission.

Note: Please use both sides of the paper and avoid unnecessary printing.