Financial Advisor Project

You are financial advisors in a major Wall Street investment firm, M.A. Miller. You have taken a summer out of college to be unpaid interns. You are going to be advising clients on what stocks look like they will be performing well in the next year.

Your chief of operations, Mark Miller, has asked you to do research and find out the winning stocks.

• Find at least one (more is better) stock profile that looks like a winner (the price is continuing to increase) and print out a plot that shows it as a winner.
• Draw linear regressions that fit the data pretty well.
• Make an equation in slope intercept form that describes the stock price over time.
• Check to see that the “price to earnings” ratio (P/E) ratio is not too high. If a company has a P/E ratio that is too high, its price might be inflated through speculation, and isn’t really a good buy.
• If you think that the price of a stock is going to increase in the future, do a little research and find out what is happening with the company to make it a good prospect for the future.
• Using the linear regression equation that you generated, predict the price of your stock one year into the future.
• How much money would you make if you bought one share of your company at the current price and sold it one year in the future, if current trends continue?
• Calculate the annual percent rate of change (APR) of your stock.
• Be prepared to present your investment advice in class on Wednesday morning.