Case Studies and Research in Banking and Finance

BFF5130

Case studies and research in banking and finance

Final Research Project

Due: 24 October 2016 at midnight (ie 2400pm).

Name: Yingchen Zhou

Student ID: 26762757

Lecture: 10 a.m. of Monday

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Abstract

A financial crisis is a situation in which the value of financial institutions or assets drops rapidly, it is often associated with a panic or a run on the banks, in which investors sell off assets or withdraw money from savings accounts with the expectation that the value of those assets will drop if they remain at a financial institution. ("Financial Crisis", 2010)

Nearly all firms are suffered during the period such as that of subprime crisis during 2008, however, industries might be effect differently during the same time. The aim of this report is to find out the effect of financial crisis to the stock price of different industries as stock price can directly reflect the overall performance of a business. The research outcome can help different firms to make further strategy to minimize the effect and prevention measurement to crisis.

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Introduction:

Financial Crisis has a worldwide effect on different kinds of industries and business. In the past 10 decades, two worldwide financial crises have taken place, one of that was during 1929 to 1939 which was called Great Depreciation, and the nearer one was among 2007 to 2009 which was called the subprime crisis. Nearly all of the industries suffer seriously during worldwide financial crisis, however, different industry within different areas might suffered differently during the crisis. The aim and motivation of the report is to find out if industries suffer differently during financial crisis.

The theory that supposed of the outcome is that, the degree of suffer of kinds of industries are different. The brief research method is to comparing with the relevant and correlations of the stock price of some of the sample industries with that of Dow Jones Indexes during 2008. If a result come up with the trend of regression analyzes different among these industries samples as the line chart with different slope of regression, the hypothesis can be identified. Following the result, the report can contribute to predict or minimize the loss for different industries using further kinds of the most efficiency methods to these kinds of firms. (Havemann, 2016)

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