World Oil Prices Part 2 – Improved Forecast

Now we are going to possibly improve our forecast for next May’s world crude oil price. The way we are going to do this is by limiting our regression to just the last year of oil price data, 2007 – 2008, from the U.S. Energy Information Agency.

Benchmark 1: Either use your World Oil Prices data from the last assignment or download the following file here: world_oil_98_08.xls . Make a new sheet in the spreadsheet and call it “07-08″.

Benchmark 2: Copy and paste the last year of the oil price data into the “07-08″ sheet. In column C, assign a number that represents the day . Let 5/11/2007 be day 1, 5/18/2007 is day 8, and so on. Stretch this “day number” out one year from 5/8/2008 to 5/8/2009. This is how we can forecast the oil price on May 8, 2009.

Benchmark 3: Here are the regression equations that we are going to use for our possibly improved forecast. Try these out: Linear fit: y = 0.122x + 60.32; 2nd order polynomial fit: y = 6.3715e-07*x^3 – 2.0468e-04*x^2 + .11884*x + 62.211

Apply these equations to your data and make three more forecasts for the price of oil on May 8, 2009.

Benchmark 4: Make a plot that has the oil price in dollars per barrel on the vertical axis, and the date on the horizontal axis. Include everything from May 8, 2007 to May 8, 2009. Put the 2007-2008 oil price data on this chart, as well as the linear, power, and 3rd order regression curves. So you should have one squiggly line (the real data) and three smooth curves that go out past May 2008 into the future. Label your regression curves with their type (e.g., linear, power, etc.).

Benchmark 5: Publish your revised forecast with a graphic and a personal analysis on your DP. What do you think?  How realistic is it to forecast oil prices using regression techniques?

Have fun!

World Oil Prices: Where are they going?

Oil futures are now trading at $136/bbl on the New York Stock Exchange. The United States is currently being jarred by a market-driven transition toward more efficient energy use. The U.S. oil problem is huge – oil prices have doubled in the last year, and quadrupled in the last four years. How much will they increase?

Assignment: You are going to be making a regression-based forecast of oil prices (in dollars per barrel) for the next year.

Benchmark 1: Start a new entry on your DP that will describe your forecast for the price of oil for the next year. Don’t publish it yet.

Benchmark 2: Find the definition of a regression. We are going to be using several different types of regressions for our forecasts of oil prices for the next year. Explain to whoever might be reading your DP what a regression is and how it might be used to forecast oil prices.

Benchmark 3: Download the following data from the U.S. Energy Information Agency about world oil prices: World oil price data in .xls format (ctrl + click and save file as) Open the file in a spreadsheet application (Neo Office or Google Docs should be fine). Column 1 is the date (mm/dd/yyyy) and Column 2 is the world oil price in USD/bbl.

Benchmark 4: Write down on a sheet of paper the following information:

2nd order polynomial: y = 7E-06x2 – 0.008x + 19.80

3rd order polynomial: y = 4E-09x3 – 1E-05x2 + 0.022x + 10.44

6th order polynomial: y = - 5E-14x5 + 2E-10x4 – 3E-07x3 + 0.000x2 – 0.049x + 13.10

Benchmark 5: Make a new column in your spreadsheet to the left of the date. You are going to give each date in the dataset a number: Make the first cell 1. Then in the cell A2 enter the formula “=A1+7″. Then stretch this formula down to the end of the dataset. This number represents the day number.

Benchmark 6:Now enter the polynomial regression equations into the remaining columns, starting with column 4. If you’re not sure how to do this, for the regression y = 7E-06x2 – 0.008x + 19.80 you could type the following in cell D1: “=7e-06*(A1^2) – 0.008*A1 + 19.80″.

Enter each of the regression equations that I gave you. Make sure to stretch them all the way down to the end of the dataset.

Benchmark 7: Which regression predicts the price of oil on May 08, 2008 the most closely? Publish this conclusion on your DP entry, and tell the world which equation you used.

Benchmark 8: Now we are going to make a prediction for 365 days into the future. So what you have to do is extend the number of days in column A by 365 days, from 3655 to 4020. So basically we are trying to predict what the price of oil will be one year from now, on day 4020.

Benchmark 9: Make a chart that has each of the regressions on one sheet. Which forecast do you think is the most reasonable? Put your chart on your DP.

Benchmark 10: Write your official forecast for oil prices in May 2009. What do your base your forecasts on, and how much confidence do you have in your forecasts? Write a one paragraph analysis of your forecast.

Challenge Option: 1) What is the current daily rate of change of the price of oil? What about the monthly and yearly rate of change? How about the annual percentage rate of change of the price of oil? 2) Take the first derivative of one of your regression equations. Plug today’s “day number” from the first column of your spreadsheet into the first derivative. According to the first derivative, what is the current daily rate of change of the price of oil? Put some of this information on your blog.

Gas Pump Murder – Mark Miller (Smart Nation) – Inspired by the works of Zach de la Rocha and Chris Haack

How Things Work

How it Works examples from another High Tech High classroom

Sell T-shirts for Free

If you sold a t-shirt on your own web store (like the future website www.nitroideas.com) for $20, then automatically forwarded the order to www.spreadshirt.com, who charged you $13.50 for the shirt and would print and ship it for you automatically, without a t-shirt ever passing through your hands, you could make $6.50 a shirt for your own original contribution to the world.

Sounds pretty good to me:)

Investment Contest

The Stock Market: Providing Capital for Growing Companies

The venerable symbol of the Bull Market on Wall Street in New York

For the remainder of the school year, we will be investing in stocks, commodities, and currencies with virtual money. By “virtual” money, we mean that you can make trades and invest just as you would with your own money, but you trade with money that doesn’t really exist at all. This way you can practice trading in a “safe” way. We will be checking up on our investments on a weekly basis, and we may even do a little day trading.

So we are going to play a little game to see who can make the most money off of their capital gains. You will get $1000 to trade.

Due at beginning of class on Wednesday, April 9 2008!!!

Benchmark 1. First we need to set up accounts with a virtual trading system online. One relatively easy virtual broker is the Virtual Stock Exchange (VSE) at http://vse.marketwatch.com/Game/Homepage.aspx

Set up a portfolio at Virtual Stock Exchange. Go to “Find a Game to Join,” and look for “HTHgame”. Now join the HTHgame using the password “hungry”.

Benchmark 2. You can only trade during business hours in New York. So in the meantime, we are going to need to do some research. Pick two companies and calculate the 4-year annual percentage rate of change, average monthly rate of change, and average daily rate of change of the price of shares of those companies. Pick two commodities (called “futures”), and pick two foreign currencies. Make the same calculations for your commodities and foreign currencies as you did for the stocks (4 – year annual percentage rate of change, average monthly rate of change, and average daily rate of change of price). Post this information on your blog.

Benchmark 3. Vocabulary. Find the following terms and explain them on your blog!

• Market Open Order
• Market Close Order
• Stop and Limit Order
• Market Volume
• P/E Ratio
• Beta
• Capital Gain
• Blue Chip Stock
• Bull Market
• Bear Market

Benchmark 4. Some of you have already done this, but buy a few shares of companies that look to you like they have good prospects. How much does it cost you to make an order? How much capital gain must you have to justify making a trade?

Benchmark 5. Renewable Energy Investment Game. We’re going to put some money in the renewable energy technology industry to see if it is achieving any significant growth right now. Search for the HTHrenewable game on the Marketwatch Virtual Stock Exchange, and join it. The password is “hungry”.

Currency Investment: Can it work?

Currency Investment: Can it work?

(20 points)

In January of 2004 you inherited $1000 from a previously unknown wealthy family member. That family member has stipulated that you invest your $1000 gift in foreign currencies until April 1st, 2008. Now you can cash out and see how much you earned.

1. What would be the average annual percentage earned on Euros (purchased with US Dollars) from January 2004 to April 2008? (Hint: Use the Yahoo! Finance currency converter).

2. Your relative required you to invest $100 in the Singapore Dollar (SGD). How much profit would you have earned from Jan 04 to Apr 08? What is the annual percentage earned?

3. Your relative required that you invest $100 in the Mexican Peso (MXN). Did your investment gain or lose value? What is the annual percentage earned?

4. Choose five other world currencies and calculate the annual percentage that could be earned from each if you purchase them in US Dollars (USD). Put this information in a table.

5. Based on your analysis of these 8 different currencies, in which currency should you have put the remaining $200? What is the final value of your $1000 from January 2004? Did you lose or gain money? What was your overall annual percentage rate?

Making Money

Making Money

Can the changing economy be used to make money, and how?

Today, we are setting out to make some money. The trouble is, we don’t have any. Every one of us is a broke investor. How are we going to change this situation around?

Your task: Make a financial plan that will earn you and your investment partner as much as possible this summer. For our purposes “the summer” will be defined as July 1st to August 30th. Your sources of outside money may be to work as a full time employee for at least minimum wage and up to $10 an hour (40 hours per week max), or to borrow money from family (maximum $2000 at a simple interest rate of 10% of the principal). Assume that you will be living at home, your family will be feeding you and not charging you rent, and that you can ride your bike to work.

Important: Assume that the Internal Revenue Service will tax you 25% of everything that you make. You must take this out of all work and business income.

Benchmark 1 (10 points). Describe your business and financial plan in a one paragraph written abstract. How are you going to make money? How much do you think you can make over the summer after taxes? You need to use the money you earn and borrow and invest it or start a business that could operate over the two month summer season.

Benchmark 2 (20 points). Document using an itemized list your expected expenditures and revenue over the course of the summer. Include the date of each expected expense and payment. Don’t forget to include interest on any money borrowed, taxes, and the cost of anything you will need to purchase to make your business work. What will your net profits be? The word “net” indicates the total amount after taking out expenses and taxes.

Benchmark 3 (30 points). Make a visual advertisement for your business that could either go online or in print. Present it to the class!

Benchmark 4 (15 points). Post your business plan and advertisement on your blog.

All benchmarks due by end of the first class on Thursday.

Business ideas:

Keeley and Frankie: Dog Walking and Washing

Ryan and Rachelle: Nature Walks with Gourmet Lunches

James and Jamie: Skateboard Vendor

Travis and Johnnie: Metal Concert Merchandise Vendor

Natalie and Nathaniel: Book Sales

Taylor: DVD and Video Game Sales and Rental

Zach and Jessica: Investment

Jasmine and Justus: Investment in Apple Stock

A Day in the Life of an African

Poster Presentation for Exhibition (100 points)

 

 

 

 

 

 

 

 

 

 

 

 

Mount Kilimanjaro looking over maize crops (Photo: US Aid)

You will be researching, composing, printing, and displaying a research poster for display at our exhibition night on Thursday, 13 March, 2008. You will be working with the same groups as you have had in your humanities and art classes.

The purpose of your research poster is to show quantitatively (with estimates and statistics) how the life of an African is different from (and resembles!) the life of a European or an American.

Benchmarks:

1. Overview email: Your group needs to first choose a European country that will aid in the comparison of your countries. Then send an email to me at mmiller at hightechhigh.org telling me the following: Your group’s African country, your group members, and the European country you are using for statistical comparison. (5 points, due by the end of class on Wednesday, 05 March 2008)

2. Data collection: Collect and calculate the data listed under “Statistics to Find” for all three countries (your African country, your European country, and the U.S.). Collect your data as a group and email your data with references as a group to me. (15 points, due by the beginning of class on Friday, 07 March 2008)

3. Graph production: In a NeoOffice spreadsheet or in Microsoft Excel, make at least two bar or column graphs that enable side-by-side comparison of some statistics for your three countries. Make sure your bar graphs are colorful. Send me an email as a group with your graph attached. (10 points, due by the end of class on Friday, 07 March 2008)

Example of a column graph:

4. Table production: In Microsoft Office or NeoOffice, make a table that contains all the “Statistics to Find.” Your top row should contain the names of your countries, as shown in my example. Column 1: Description of statistic with units. Columns 2-4: Data arranged by country. We may reduce the size or number of entries on this table with instructor approval if the table isn’t visually pleasing on your finished poster. Publish this table to each group member’s blog individually and send me a link to your blog post by email. (10 points, due by the end of class on Friday, 07 March 2008)

Example of a 3X3 table (your table will have many more rows than this):

5. Image search: Find 3 striking images that are in the public domain (not copyrighted – usually from .gov or .org sites) that you can include on your poster. We will select images for the posters through a peer review process. This should be a striking image that includes people from your country. Post this image to each group member’s blog individually and send me a link to this blog post by email. (10 points, due by the end of class on Friday, 07 March 2008)

6. Written interpretation of data: Using your data in the tables and graphs you have produced, as individuals, write a reflection, poem, essay, analysis, or other substantial written work that quantitatively compares what you imagine a day in the life of an African, a European, and an American to be like in terms of the economy, water, transportation, and energy infrastructure of those countries.

Be creative and analytical. Think about the statistics that you have compiled for this project and try to infer what they mean in terms of the daily lives of citizens of your chosen countries. Give evidence for your statements, even if you choose to compose a poem. In this case, you do not need to include references (they will be on the poster). This work will be on display for your exhibition night. (30 points, due at the beginning of class on Monday, 10 March 2008 – email me your work and bring a hard copy to class for peer review)

7. Beginning the poster: Begin to lay out your research poster in Adobe Illustrator. Your poster should include the following:

• A catchy but professional title
• The names of your group members (first and last names)
• Your institution and address (in this case, High Tech High North County)
• The HTHNC logo
• A map showing your country’s location in Africa
• At least one bar or column graph (subject to change)
• At least one table (subject to change)
• At least one image showing people from your nation
• At least one symbolic image or icon
• A text summary of your group’s collective analysis of the data
• Captions for all graphs, tables, images etc. Call each Figure 1., Figure 2., and so on…
• References (complete references to any data, images, or ideas that you have used. I recommend leaving out any web addresses, just cite the authors)

So that I can take a look at your work, save your rough drafts as .pdf files and email them to me as a group at the end of each class. (10 points, .pdf file of what you have due by email from each group by the end of class on Monday)

8. Revision of written piece: Make improvements to your written comparative piece and submit it to me as email and as a hard copy by the beginning of class on Tuesday. (10 points)

9. Peer review of posters: Take five minutes and present your poster to another group. Choose a person to lead structured feedback on the posters and write your comments. Share your feedback with the group. (10 points, to be done in class on Tuesday)

10. Finishing up posters: We need to have our posters in good shape by the end of class on Tuesday. Send me a .pdf of your group’s poster at the end of class on Tuesday. (10 points)

11. Final draft of posters: Have your poster ready for printing by the end of the first hour on Thursday. (10 points)

Statistics to Find

Not an exhaustive list! If you think of anything potentially interesting, use it!

Population

Population Density

Life Expectancy at Birth

Freshwater withdrawal per person

GDP per capita

Unemployment Rate

Inequality (Gini Index)

Budget: Revenues vs. Expenditures

Public Debt as a percentage of GDP

Electricity Consumption per person

Price of Electricity in US dollars per kWh

Oil consumption per person

Price of Gasoline in US dollars per gallon

Oil proved reserves

Natural Gas Consumption per person

Natural Gas proved reserves

Total Energy Consumption per person

External Economic Aid per person

Airports per million people

Railway km per million people

Roadway km per person

Mean number of automobiles per household

Forum

adapted from Raphael’s School of Athens

A Great Book on Transportation Infrastructure Planning

“Carfree Cities” by J.H. Crawford, International Books – Utrecht, Netherlands