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Hi you helped me on previous homework, can you help me with this one please. thank you very much

HOMEWORK
QUESTIONS

Subject
Code
and
Title

STAT
2000:
Quantitative
Analysis

Assessment

Module
5:
Homework
questions

Information

When
there
is
evidence
of
dishonesty,
a
student

will
face
Misconduct
Procedures.
refer
to
Torrens

policies
and
procedures
in:

Instructions

these
questions
and
problems

Chapter
14
Questions
and
problems

23,
24,
25,
26,
27,
28,
29,
30,
33,
34,
40

Use
the
following
data
and
Microsoft
Excel
program
to
questions
23?30.
The
table
gives

monthly
rates
of
return
for
3-??month
treasury
bills;
the
value
weighted
New
York
Stock
Exchange

Index;
and
Chrysler,
Ford,
and
GM
stock.

23.
In
finance,
we
are
often
interested
in
how
the
return
of
one
stock
is
related
to
some
market

index
such
as
the
NYSE.
The
model
we
usually
estimate
to
understand
this
relationship
is
known
as

the
market
model
and
is
given
by
the
equation

R
j,
t
=
?j
+
?
j
R
m,
t
+
e
j,
t

where:

R
j,
t
=
return
on
stock
j
in
month
t

R
m,
t
=
return
on
some
market
index
in
month
t

?j =
intercept
of
the
regression
line

?j
=
slope
of
the
regression
line

e
j,
t =
a
random
error
term

Use
Excel
to
do
the
following:

(a)
Draw
a
scatter
diagram
for
Ford
and
the
NYSE
index.

(b)
Estimate
the
parameters
?
and
?.

(c)
Compute
SSE,
SSR,
SST,
R2,
and
the
standard
error
of
the
estimate
for
this
regression.

(d)
Compute
the
standard
error
for
b,
and
use
a
t-??
test
to
test
the
significance
of
the
slope
of
the

regression.

Page
1
of
4

24.
In
finance,
we
sometimes
choose
to
estimate
the
capital
asset
pricing
(CAPM)
version
of
the

market
model,
which
is
given
by
the
equation

where
Rj,t
is
the
return
on
a
risk-??free
asset
(such
as
T-??bills)
in
month
t.
Repeat
parts
(a)?(d)
of

question
23
for
the
CAPM
version
of
the
market
model
using
the
Excel
program.

25.
Using
R2
as
the
measure
of
goodness
of
fit,
compare
the
market
model
estimated
in
question
23

with
the
CAPM
version
estimated
in
question
24.

26.
Find
a
95
%
confidence
interval
for
the
slope
coefficients
you
calculated
in
questions
23
and
24.

Which
estimate
of
?
has
the
wider
confidence
interval?

Page
2
of
4

27.
Suppose
we
are
interested
in
testing
whether
?
is
equal
to
1.
Then
we
would
test
H0:
?
=
1

against
H1:
?
?1.
Using
the
model
given
in
question
23,
test
this
hypothesis.

28.
Repeat
questions
23?27,
using
GM
stock?s
rates
of
return.

29.
Repeat
questions
23?27,
using
Chrysler
stock?s
rates
of
return.

30.
Suppose
we
are
interested
in
the
relationship
between
the
return
on
the
risk-??free
asset
(T-??bills)

and
the
return
on
the
NYSE
index.

(a)
Estimate
the
intercept
and
the
slope
for
a
regression
of
R
m,
t
on
R
f,
t.

(b)
Compute
the
standard
error
of
the
regression
and
use
a
t-??
test
to
test
the
significance
of
b.

(c)
Calculate
a
99
%
confidence
interval
for
b.

33.
When
estimating
the
relationship
between
the
price
of
a
good
and
the
quantity
of
the
good
sold

(the
demand
curve),
economists
sometimes
choose
to
transform
the
price
and
quantity
data
by

taking
the
natural
logarithm
of
both.
When
this
is
done,
the
slope
coefficient
b
can
be
interpreted
as

the
price
elasticity
of
demand
(the
sensitivity
of
quantity
to
changes
in
price).
Consider
the
following

information
on
the
price
and
quantity
of
So-??Good
Candy
Bars.

Price
(\$)

Quantity

1.50

100

1.25

135

1.00

175

0.75

225

0.50

300

0.25

500

Use
the
EXCEL
program
to
the
following:

(a)
Estimate
the
elasticity
of
demand
for
these
data.

(b)
Use
a
t-??
test
to
test
the
significance
of
b.

(c)
Construct
a
95
%
confidence
interval
for
the
price
elasticity.

34.
The
batting
instructor
of
the
Minnesota
Twins
is
interested
in
the
relationship
between
number

of
hours
of
batting
practice
and
batting
average.
He
collects
the
following
data
on
8
players:

Hours
of
batting

practice
per
week

5

8

9

10

11

9

7

6

Batting

Average

0.265

0.277

0.254

0.320

0.301

0.260

0.230

0.272

Use
the
EXCEL
program
to
the
following:

Page
3
of
4

(a)
Draw
a
scatter
diagram
for
these
data.

(b)
Compute
the
regression
parameters
a
and
b.

(c)
Compute
the
standard
error
of
b,
and
use
a
t
-??test
to
test
the
significance
of
the
slope
of
the

regression.

(d)
Construct
a
95
%
confidence
interval
for
b.

40.
Investment
sometimes
recommend
holding
gold
as
part
of
an
investor?s
portfolio,

because
the
value
of
gold
appears
to
be
negatively
related
to
that
of
the
stock
market.
Thus,
when

the
stock
market
goes
down
in
value,
the
value
of
gold
goes
up
in
value,
and
some
of
the
investor?s

losses
in
the
market
are
offset
by
gains
in
the
value
of
her
or
his
gold.
The
accompanying
table
shows

data
on
annual
rates
of
return
for
a
gold
mutual
fund
and
for
the
S&amp;P
500.

Year

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

Gold
mutual

fund

151.30

70.70

-??18.90

47.30

8.20

-??25.30

-??11.00

30.10

51.50

11.30

S&amp;P
500

18.16

31.48

-??4.85

20.37

22.30

5.97

31.05

18.75

5.24

16.58

Use
EXCEL
to
the
following
questions:

(a) Estimate
the
slope
of
the
regression
of
the
rates
of
return
of
the
gold
mutual
fund
against

those
of
the
S&amp;P
500.

(b)
Use
a
t-??
test
to
test
the
hypothesis
that
b
&lt;
0.

(c)
If
you
expect
the
rate
of
return
to
be
20
%
next
year
(1989),
what
is
the
rate
of
return
of
the

gold
mutual
fund
you
expect?

Page
4
of
4

Paper#9210697 | Written in 27-Jul-2016

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