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Using Bloomberg as a Teaching Tool in Economics

Using Bloomberg as a Teaching Tool in Economics. Hossein S. Kazemi Associate Professor of Economics Stonehill College 8 th Annual Economics Teaching Conference Orlando, Fl. November 8, 2012. Motivation. Teaching Economics vs. science engaging students reinforcing the material

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Using Bloomberg as a Teaching Tool in Economics

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  1. Using Bloomberg as a Teaching Tool in Economics Hossein S. Kazemi Associate Professor of Economics Stonehill College 8th Annual Economics Teaching Conference Orlando, Fl. November 8, 2012

  2. Motivation • Teaching Economics vs. science • engaging students • reinforcing the material • more in depth understanding of the material • better absorption of material • better retaining of material • improved assignments • improved test results • better real life understanding of economics • better internships and jobs • better skills at work • increased number of majors • happier administrators • happier book publishers

  3. Typical Teaching Approaches • chalk and talk method • a good lecturer will capture students' attention • a good lecturer will attract more students • a good lecturer will keep students engaged • publisher supplied power point presentation for the text • forces the instructors to stay focused • minimizes the possibility of going on a tangent • Shallow • boring to students • boring to the instructor • did I say boring?

  4. Review of the Literature • Out of 14 of the articles in this paper's literature review, 12 argue that use of technology helps. • the two that did not were based on the following • that students’ performance in virtual courses was inferior to that of students who took live or ‘hybrid’ classes where face-to-face lectures were integrated with a variety of online material. • A study of the effectiveness of web-based homework in teaching undergraduate business statistics" did not find any significant difference between the performance of students who had been assigned a variety of web-based homework and students who had been assigned traditional textbook-based homework.

  5. Summary of the Lit. Review • study author/s • title • technology used • principal findings • bottom line • yes or no

  6. Table 1 Summary of Studies of the Efficacy of Technology in Teaching Economics

  7. Table 1 Continued…Summary of Studies of the Efficacy of Technology in Teaching Economics

  8. Table 1 Continued… Summary of Studies of the Efficacy of Technology in Teaching Economics

  9. Table 1 Continued… Summary of Studies of the Efficacy of Technology in Teaching Economics

  10. Table 1 Continued… Summary of Studies of the Efficacy of Technology in Teaching Economics

  11. Table 1 continued…Summary of Studies of the Efficacy of Technology in Teaching Economics

  12. Five Step Approach • Show students the tools in the discipline • Use Bloomberg to crunch the numbers and see how things work at the technical level • Use Bloomberg to show the interaction between economic news and financial markets • Have them follow up the lecture and Bloomberg presentation with CNBC, WSJ, the Barron’s and the Economist • Have them produce a report that highlights what they have learned and its connection with what they have seen and read in the media

  13. Courses where Bloomberg used: • Bloomberg is used by the author in a series of Economics and Finance classes over the course of the past 15 years at four of the major Boston area colleges in business, economics and school of management. Courses such as Money & Banking, Macro Theory, Investments, Monetary Policy, International Finance, Impact of News on Financial Markets, Capital Markets and Investments, Investments & Portfolio Analysis, Money & Financial Markets, Fixed Income Analysis, and Portfolio Management.

  14. Examples of How to Use Bloomberg • Effect of QE on Equity Markets • Equity Analysis • Treasury Securities • Yield Curve • Fixed Income Analysis • Market Indexes and Volatility • Fed Funds Rate and Taylor Rule

  15. Dow Industrial’s Response to QE1

  16. Dow Industrial’s Response to QE2

  17. Dow Industrial’s Response to Operation Twist

  18. Figure 1. Bloomberg Quote for Apple Computers Inc. Source: Bloomberg ProfessionalNovember 7, 2012

  19. Figure 3. Bloomberg Earnings Estimate for Apple Computers Inc. Source: Bloomberg ProfessionalNovember 7, 2012

  20. Figure 4. Beta for Apple Computers Inc. Source: Bloomberg ProfessionalNovember 2, 2012

  21. Figure 5. Bloomberg Earnings Estimate V.S. Price for Apple Computers Inc. Source: Bloomberg ProfessionalMay 26, 2012

  22. Figure 6. Bloomberg Bollinger Bands for Apple Computers Inc. Source: Bloomberg ProfessionalNovember 7, 2012

  23. Figure 7. Price Ratios for Apple Computers Inc.  Source: Bloomberg ProfessionalMay 26, 2012

  24. Figure 8. Price and Volume Movements for Apple Computers Inc.Source: Bloomberg ProfessionalNovember 7, 2011- November 7, 2012

  25. Apple’s 20% decline since it’s September 19th peak

  26. Figure 9. 10-Day Intraday Price for Apple : Face Book Phenomenon Source: Bloomberg ProfessionalMay 14 - May 25, 2012

  27. Figure 10. Trade/Quote Recap for Apple Computers Inc. Source: Bloomberg ProfessionalNovember 7, 2012

  28. Figure 11. Relative Value Comparison for Apple Computers Inc. Source: Bloomberg ProfessionalNovember 7, 2012

  29. Using Bloomberg to Present Treasury Actives and Derive Yield Curve • Treasury Bills • Treasury Notes • Treasury Bond • Treasury Inflation Protected Securities (TIPs) • Derivation of Yield Curve

  30. Figure 12. Treasury Actives (PX1) Source: Bloomberg ProfessionalNovember 7, 2012

  31. Figure 13. US Yield Curve Source: Bloomberg Professional November 7, 2012

  32. Figure 14. International Yield Curve Source: Bloomberg ProfessionalNovember 7, 2012

  33. Bonds: Pricing/Yield • bid/ask price • yield to maturity • accrued interest • reinvestment interest • street convention • duration • convexity

  34. Figure 15. Treasury Actives Source: Bloomberg ProfessionalNovember 7, 2012

  35. Figure 16. Yield Analysis Source: Bloomberg Professional November 7, 2012

  36. Figure 17. Impact of News on Financial MarketsNovember 7, 2012

  37. Figure 18. Taylor Rule: Inflation/Unemployment Gap Model

  38. Figure 19. Taylor Rule: Stone & McCarthy Model

  39. Figure 20.Taylor Rule: Deutsche Bank Model

  40. Challenges • Administrators • lack of support • poor understanding of Bloomberg capabilities • budgetary limitations • IT • lack of timely response when help is needed • slow bandwidth • rare internet connection interruption • Students • addiction to using ctrl+cand ctrl+v • unwillingness to sub Bloomberg for the internet

  41. Challenges continued... • Instructor • teaching with a new technology is not easier • time consuming • requires revamping the entire course • have to be ready to do chalk-and-talk if any glitches • be prepared to hit the curve balls from technology suppliers • Faculty Peers • the biggest hurdle • unwillingness to sign on • unwillingness to learn new tricks • unwillingness to have their students trained • see it as too big of an investment

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