Forecast Competition
Overview Meeting
April 4th 2007
Chad Moore - FMA Director, Finance
Divide and Conquer
The Best of the Best
Get it right about 52% of
the time
As Team Leader My Duties are
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Provide an example on how to
analyze
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Coordinate and support the 6
different forecast teams
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Centralize the final application
process
The Indices We are Predicting
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The Euro (in US dollars)
NASDAQ composite
MSCI EAFE (prelim)
Oil (Nymex Crude Future)
10 year Treasury Note Yield
S & P 500
Euro (in U.S. dollars)
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The Euro is the currency that is distributed by the European
Union to the countries who join the EU and wish to use it. The
United Kingdom is not one of these. The European Union
(EU) is a union of twenty-seven independent states based on
the European Communities and founded to enhance political,
economic and social co-operation. Those who work on this
prediction will predict what one euro will be equal to in U.S.
dollars on May 11th, 2007. As of 4/3/2007 (1 Euro = 1.3356
U.S. dollars).
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Possible Key Indicators: Strength of the U.S. Dollar, British
pound, U.S. Federal Reserve interest rate, home prices, political
turmoil.
Websites: http://euobserver.com/ ,
http://www.gocurrency.com/outlook-eur-usd.htm ,
www.marketwatch.com , www.smartmoney.com
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NASDAQ Composite
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The NASDAQ is an electronic exchange where stocks are
traded through an automated network. It stands for National
Association of Securities Dealers Automated Quotations
System. To tell if a company is listed on the NASDAQ
check the ticker symbol... those made up of four letters are
listed here (e.g. Microsoft = MSFT, Dell Computers =
DELL). About 5000 stocks are traded on the NASDAQ,
Mutual funds and Option Contracts are also traded. Those
who work on this prediction will predict what the closing
price of the NASDAQ composite will be on May 11th,
2007. As of 4/3/2007 NASDAQ = 2450.33.
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Possible Key Indicators: U.S. Dollar, S & P 500, U.S. Federal
Reserve interest rate, Gas Prices, Economic condition.
Websites: http://www.nasdaq.com/ , www.marketwatch.com ,
www.smartmoney.com
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MSCI EAFE (Prelim.)
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The MSCI as an Index is recognized as the pre-eminent
benchmark in the United States to measure international
equity performance. It comprises 21 MSCI indices,
representing the developed markets outside North
America: Europe, Australia, and Asia. Those who work
on this prediction will predict the closing price, i.e. the
price at which shares were last traded on May 11th 2007.
As of 4/3/2007 MSCI EAFE = 77.14.
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Possible Key Indicators: U.S. Dollar, Japanese Yen, British
Pound, political turmoil, the S&P 500, NASDAQ
Websites: www.marketwatch.com , www.smartmoney.com ,
http://finance.google.com/finance?q=EFA ,
http://www.mscibarra.com/products/indices/stdindex/perform
ance.jsp
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Oil (Nymex crude future)
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The Crude Oil future is a futures contract on Crude Oil.
This means people are buying the future delivery of crude
oil marked by the price in the contract. These futures
contracts themselves can be re-sold at the owner’s
discretion in the open market. Those who work on this
prediction will predict the closing price, i.e. the price at
which the futures contract was last traded on May 11th
2007. As of 4/3/2007 Crude Oil May 07
(CLK07.NYM)= 66.48.
Possible Key Indicators: U.S. Dollar, political turmoil,
ecologic disaster
Websites: http://www.wtrg.com/daily/crudeoilprice.html ,
www.cnn.com , www.bloomberg.com
10 – Year Treasury Note Yield
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The 10 year treasury Note is an intermediate term debt
obligation of the US government that has a maturity from one
to ten years. They are issued in $1,000 denominations and pay
interest semiannually. Treasury notes are commonly
abbreviated as "T-notes". Those who work on this prediction
will predict the closing yield, i.e. the yield on the note that was
last traded on May 11th 2007. As of 4/3/2007 10-YEAR
TREASURY NOTE (^TNX) = 4.66
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Possible Key Indicators: U.S. Dollar, U.S. Federal reserve
Interest Rates, Economic condition (national and global), GDP
Websites: www.bloomberg.com ,
http://useconomy.about.com/od/economicindicators/p/Treasuri
es.htm , www.marketwatch.com
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S&P 500
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The S&P 500 is the index of the 500 largest companies in
the United States. Although the Dow Jones Industrial
Average is the more popular indicator, the S&P 500 is
believed to be more representative of the entire market.
Those who work on this prediction will predict the
closing total price of the index on May 11th 2007. As of
4/3/2007 S&P 500 INDEX,RTH (^GSPC) = 1437.77
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Possible Key Indicators: U.S. Dollar, U.S. Federal
reserve Interest Rates, Economic condition (national and
global), GDP
Websites: www.bloomberg.com ,
www.marketwatch.com,
http://finance.yahoo.com/q?s=%5EGSPC .
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Choosing your Index …
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Since I am learning about interest rates and there
affect on the market, I chose to work on the 10 –
Year Treasury Note Yield.
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Everbody will only work on 1 index, and they will
get to choose what and how to predict for it
How do you Predict?
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I have come up with a basic model that will predict the
monthly price increase and allow the incorporation of
market research.
You can make your own model.
Things we need from you
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Your prediction of the price as of May 11th, 2007
The Spread (Whether it is a Confidence Interval or one
of your own intuition)
Learning Experience
No matter what you end up doing after college, you
will benefit from this experience.
 There is not a recruiter or potential employer out
there that would not be impressed by this.
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REMEMBER …
The Best of the Best
Get it right about 52% of
the time
Any Questions?
FMAchapter@csus.edu