* Methodology of the Report:
As the technical framework the research methodology works in the research. Research methodology provides a clear study in addition to the explanation of the many stages of the research for addressing the problems of the research. Different types of the research are necessary for the purpose of finding the main principles of the specific object. According to Babbie, (2004), “Epistemology is the science of knowing like the science of knowledge acquirement while methodology is recognized to be the science of finding out.” According to Arnould et al., (2004), “throughout the course of consumer behavior research, gathering data, recording and ...view middle of the document...
Statistical Techniques Used:
During the course of research we have used the following statistical tools:
Arithmetic mean: xin ; to calculate average number of shares, and average portfolio size.
Weighted Mean: i=1nxi.wi ; to calculate the portfolio beta, as well as the portfolio return.
Regression Analysis: In statistics, regression analysis includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables. More specifically, regression analysis helps one understand how the typical value of the dependent variable changes when any one of the independent variables is varied, while the other independent variables are held fixed. Most commonly, regression analysis estimates the conditional expectation of the dependent variable given the independent variables — that is, the average value of the dependent variable when the independent variables are held fixed. In this report we run regression test to find out the individual company beta as well as how our dependent variable Beta (β)affected by independent variable such as, Age (measured in years), Education (which is measured by the total years of education of our investor), Monthly Income (measured in Taka), association with Dhaka Stock Exchange (measured in years).
Nature and Source of Data:
All collected data can be divided into two broad categories based on their sources. The data we have used to do our research are from Secondary source, which means, we have not collected the information directly from our investor, instead we meet with their portfolio manager, MTB Securities who was kind enough to supply us with the demographic details of these investors as well as a copy of their investment portfolio.
The individual company Beta (β)has been collected from following website www.stockbangladesh.com, which is also a secondary data source. The beta has been calculated using regression between weekly company excess return and market excess return for the last two years.
The individual portfolio data involved in this research is very recent, from 30th November. We understand the relationship between the demographic variables and beta would have been more relevant if we could collect the information during a bullish run of the stock market. Unfortunately we have to work on with recent data from a market with falling stock price and majority investors are very cautious about their buy.
The data used to calculate the individual company beta is collected from the year 2009 to 2011. As we have collected weekly price of the individual stock and the market index and then calculate the excess stock return and market return and run regression analysis with those two variable, you have got the company beta which represents the volatility of a company’s share price in response to the volatility of the market’s index. Using the data of such wide range we believe we will...