Quantitative investment Analysis – Hypothesis Testing, Text Book, Quantitative Investment Analysis


1. Do high yield (“junk”) bond returns beat typical corporate bond returns?

2. Are high yield bond returns’ variances greater than that of corporate bonds in general?

To answer these questions accurately, we use the methods of the natural sciences, namely we take the following steps:

1. State the hypothesis

2. Identify the appropriate test statistic and its probability distribution

3. Specify the significance level

4. State the decision rule

5. Collect the data and calculate the test statistic

6. Make the statistical decision

7. Make the economic or investment decision

Using the seven steps, The assignment is to compare high yield (a.k.a. junk bonds) and other corporate bonds. You need to use two data series, one for junk bonds and one for higher grade bonds. You could use total return indexes on the FRED website. There are many of them so select two series that will answer the question. Using the data, set up and conduct the experiments and report your results. Make sure to describe how you did each of the seven steps.

Do you have an upcoming essay or assignment due?

If you are looking for a similar or different assignment contact us for help by placing an order anonymously and it will be delivered in time.

Get Started & Get it within 6 Hours Order & Get it within 12 Hours

You can trust us for this and even for your future projects