BMGT 443 Lecture Notes - Lecture 2: Global Industry Classification Standard
11 Oct 2018
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Document Summary
Beginning with the eic framework to analyze microsoft, first the economy must be evaluated by using the economic surprise index. As you can see in the escu screenshots, the industries that are currently performing well as of september 11th, 2018, are the retail & wholesale and the survey and business cycle indicators. However, to properly show the sensitivity of the software industry to the economy, we have to look at the raw beta. Seen in the rv market beta screenshot, the market cap. Essentially, this means that for every 1% that the market moves, the systems software. Looking at the rv market beta screen, we also see that the raw beta for microsoft is 1. 36, meaning it is even more sensitive to market changes than the industry average. Another important aspect to consider is the spread today for the industry. As we discussed in class, most indicators of a firm"s performance can be found within the industry"s performance.
