Proceedings of the International Conference on Mathematical Sciences and Statistics 2022 (ICMSS 2022)

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Investment in Malaysia: Forecasting Fixed Deposit Using Time Series and Regression Analysis

Authors
Nuzlinda Abdul Rahman1, Kevin Pang1, 2, 3, Chen Yi Kit1, Fauhatuz Zahroh Shaik Abdullah1, *, Nur Sofiah Izani2, Wan Muhamad Amir W. Ahmad3
1School of Mathematical Sciences, Universiti Sains Malaysia, 11800, Minden, Pulau Pinang, Malaysia
2Gelugor, 11700, Pulau Pinang, Malaysia
3School of Dental Sciences, Universiti Sains Malaysia, 11800, Minden, Pulau Pinang, Malaysia
*Corresponding author. Email: fauhatuz@usm.my
Corresponding Author
Fauhatuz Zahroh Shaik Abdullah
Available Online 12 December 2022.
DOI
10.2991/978-94-6463-014-5_5How to use a DOI?
Keywords
ARIMA; Regression
Abstract

This paper studies Malaysian banking fixed deposit (FD) rates from 1997 to 2018 using time series and regression analysis. The FD rates is based on rates set by Bank Negara Malaysia. Multiple Linear Regression (MLR) is used to study the linear relationship between FD Rates and certain economic and financial indicators. The findings suggest FD Rates is heavily affected by Base Lending Rate (BLR), Consumer Price Index (CPI) and Real Effective Exchange Rate (REER). However, autocorrelation occurs and ARDL method is employed by adding variable lags. The new model adds in the lag of FD Rates, BLR and REER to fulfill the independent assumptions. Subsequently, the time series behavior of the three variables is investigated using ARIMA model approach. Forecasts of three explanatory variables for the next three years is made in order to predict the next three years FD Rates using the regression equation. The computed rates are then converted to 12-month period FD Rates. Results indicates that fixed deposit give a low but consistent return.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Conference on Mathematical Sciences and Statistics 2022 (ICMSS 2022)
Series
Advances in Computer Science Research
Publication Date
12 December 2022
ISBN
10.2991/978-94-6463-014-5_5
ISSN
2352-538X
DOI
10.2991/978-94-6463-014-5_5How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Nuzlinda Abdul Rahman
AU  - Kevin Pang
AU  - Chen Yi Kit
AU  - Fauhatuz Zahroh Shaik Abdullah
AU  - Nur Sofiah Izani
AU  - Wan Muhamad Amir W. Ahmad
PY  - 2022
DA  - 2022/12/12
TI  - Investment in Malaysia: Forecasting Fixed Deposit Using Time Series and Regression Analysis
BT  - Proceedings of the International Conference on Mathematical Sciences and Statistics 2022 (ICMSS 2022)
PB  - Atlantis Press
SP  - 34
EP  - 46
SN  - 2352-538X
UR  - https://doi.org/10.2991/978-94-6463-014-5_5
DO  - 10.2991/978-94-6463-014-5_5
ID  - Rahman2022
ER  -