It is about derivatives

1. Title
Name of the scholar
SRN
School
Guide
Name of the scholar: Arcot Purna Prasad
SRN: R20PMS01
School of Management Studies
Guide: Dr B Diwakar Naidu
Date of Presentation: 10-December-2022

2. Contents

3. Summary of the proposed work
Historical evidence shows how share prices affect financial activity of the Nation.
Attempts have been made to predict future stock prices using various methods and
tools. The main aim in this study is to determine the impact of macroeconomic
variables on selected Stock index/ indices. Model to predict future stock prices
using ANN will be developed which will have multiple hidden layers which in turn
will make the prediction more accurate. Elements like Political Risk, Pandemic,
Natural calamities will be included. However, as per historical predictions, there will
not be much of an impact on stock prices when it is predicted, the unevenness is
when the risk factors are least expected. In this particular study, this too shall be
considered. Results will show how significant impact of macroeconomic variables
on Stock prices which in turn affects the economy at large.

4. Objectives
• To analyse the impact of select Macro-economic variables on stock prices
• To examine the presence of volatility clustering in select macroeconomic
variables
• To examine the presence of volatility clustering in select Bank stocks
• To find out the relationship between Macroeconomic factors and Banking Stocks
• To model future stock prices
• To suggest ways to avoid negative impact of macroeconomic variables on bank
stocks

5. Activities carried out during
reporting period
• Review of Literature
• Study on Various elements to be covered in this study
• Working on one paper for publishing

6. Relevance of accomplished tasks
The tasks performed helps in finding the required Gap for the study.
It also helps build a complex model which could possibly predict stock
prices more accurately.

7. Outcomes
The literature reviews have helped develop my study further. The outcomes have
helped deduce that financial activity determines the strength of economy; it can
help strengthen the economy in the long run.
(Nguyen, Schinckus, Su, & Chong, 2020) in their study talks about promoting long
term wealth for the society’s well being and not just the wealth resulting
temporarily from the capital market returns. They have identified that institutional
framework of a country and its liquidity are the main key drivers of stock market; to
study this, worldwide governance indicators were used as proxies to measure
institutional quality. Basically both institutional quality as well as macro liquidity
was used in the study.

8. (Pal, 2020) was motivated to examine the effects of economic globalization and institutional quality
on financial development in top and bottom globalized developing countries using the panel data of
1984–2016 after coming across the hypothesis “Globalization-led financial development”. Economic
growth, government investment and inflation were also included as a set of control variables in
financial development function. It was found that economic globalization and institutional quality
promote financial development in both the developing regions but the effect of economic
globalization on financial development is higher in top globalized developing region than the
bottom globalized developing region. Economic globalization also enhances financial market and
impedes the development of financial institutions in top globalized developing region, while it
performs the opposite in bottom globalized developing region. Varying effects of government
investment and inflation on financial development were found, while economic growth enhances it
in heterogeneous developing regions. These results are robust across alternative panel techniques.
It was suggested that economic globalization is an instrument for the policymakers to improve
developing countries’ financial development in the long-run

9. Planned activities
• Completion of Literature Review and consolidation of the report
• Working on Research Design
• Working on technical aspect of the study
• Completion of Machine Learning Course

10. References
Pal S, Kumar Mahalik M. Factors driving financial development in top
and bottom globalized developing economies: Does economic
globalization matter? J Public Affairs. 2020;e2292.
https://doi.org/10.1002/pa.2292
Nguyen CP, Schinckus C, Su TD, Chong FHL. Determinants of stock
market returns in emerging markets: The linkage between institutional
quality and macro liquidity. Int J Fin Econ. 2020;1–15. https://doi.org/
10.1002/ijfe.2382