Exam 3 Instructions

April 10, 2017

Exam 3 Instructions:

Due Date: On or before Tue April 25
Software: Python or Sheets/Excel
Data: S&P 500 Historical Returns
Simulation: Stock Market Investment Returns
- Randomly sample the S&P 500 Historical Returns to simulate stock market returns. Assume the historical return data are normally distributed.
- Use a 40-year investment time horizon.
- Start with a $10,000 balance.
- Run a Monte Carlo simulation to generate 500 ending investment balances.
- Find the mean and standard deviation of your ending balances.
- Generate a histogram displaying the distribution of your ending balances.
Print 1 Page with your (1) name, (2) section, (3) mean and standard deviation of ending balances, and (4) the histogram displaying the distribution of your ending balances. Bring your 1-page print out to the demo.
Demo: You must demonstrate your Python program or Sheets/Excel worksheet to me in person. Be prepared to explain your simulation, answer questions and make (or allow me to make) modifications to your program or worksheet to test alternative parameters (e.g., different investment time horizon, different starting balance, different number of simulations, etc).
Due Date: Yesterday. Just kidding. But, in business, clients always want everything yesterday and prefer to pay tomorrow. So get used to it. Demo with 1-page printout due on or before Apr 25. Demo as soon as you’re ready. Earlier is better. I will leave time for demos (on your laptop or on my PC in my office) at the end of class next week. You may also demo during regular office hours, MW 12:30-2:30.
Grading: I will present Exam 3 results and your grade summary (for Exam 3 and the term) in class on Thu, Apr 27

Justin

Justin Holman is CEO of Aftermarket Analytics, where he leads efforts to develop cutting edge sales forecasting and inventory optimization technology for the Automotive Aftermarket. Prior to joining Aftermarket Analytics, Justin managed corporate consulting for the Strategy & Analytics division at MapInfo Corporation, leading major projects for retail clients including The Home Depot, Darden Restaurants, Bridgestone-Firestone, Sainsbury’s and New York & Company. Before that, Justin served as Vice President of Software Development at LogicTools, now part of IBM's supply chain application software group. Justin holds a B.A. from Claremont McKenna College, a Ph.D. from the University of Oregon and an Executive Management certificate from Northwestern University's Kellogg School of Management.

3 Comments


Rique Lucero 7 years ago

Professor Holman,

Google Sheets isn’t allowing me to copy and paste correctly, seems there is a bug. I’ve been reading some forums and this is common, and hasn’t been corrected. The problem I’m having is that when I copy my data from Python, it all gets pasted into one cell; sometimes pasting some data in one cell, then pasting some more in other cells. So, I end up with some data (10 values with commas) in A2, some data in A3 (30 values with commas) and so on until they’re all pasted; they get pasted but not in individual cells so I can properly tranpose them using the =TRANSPOSE(array) function.
Boo, I say!
I’ve tried the Special Paste and used all of the different values afforded to me, with no luck!
Maybe someone else has had this issue and found a work around.
Any advice would be much appreciated.
Thanks!

Rique Lucero (I wear my sunglasses at night)
- Reply
  
  Rique Lucero 7 years ago
  
  Oh, never mind, duh!
  If some are having this issue, go ahead and copy/paste into Google Sheets. It will be all in one cell. Then go to Data>Split Text To Columns(in the drop down menu)>Seperator(Comma). This was the trick. Off I go!
  
  Rique Lucero(Still wearing my sunglasses an night)
  - Reply
    
    Justin 7 years ago
    
    Rique,
    Glad to see you were able to sort this out. Thank you for posting your solution for the benefit of other students!
    Cheers,
    JH (wishing I was cool enough to wear sunglasses at night)