Eliminate all of the insignificant variables, Applied Statistics

Assignment Help:

The file Midterm Data.xls has a tab labeled "Many vs. S&P" which presents historical price data for several assets, a volatility condition (VIDX = 1 if the NYSE volatility is greater than 0.04), Schlumberger, Westinghouse Air Brake, Ford and Eastman Kodak. Create a multiple regression model of the S&P 500 using the other asset prices as the independent (x) variables.

Answer the following questions based on the Excel output report. Support your answers with numbers from the output report. Use level of significance = 0.05.

• Write the estimated multiple regression equation. Note: Use actual variable names and numbers. If using symbols, define them before using in the equation.

• Clearly explain the meaning of b1 (the coefficient of Schlumberger). Note: Use actual variable names and numbers in answering your question. b1 is the slope is not a sufficient answer.

• Clearly explain the meaning of b2 (the coefficient of Westinghouse Air Brake). Note: Use actual variable names and numbers in answering your question. b2 is the slope is not a sufficient answer.

• Clearly explain the meaning of b3 (the coefficient of Ford). Note: Use actual variable names and numbers in answering your question. b3 is the slope is not a sufficient answer.

• Clearly explain the meaning of b4 (the coefficient of Eastman Kodak). Note: Use actual variable names and numbers in answering your question. b4 is the slope is not a sufficient answer.

• Clearly explain the meaning of b5 (the coefficient of Volatility). Note: Use actual variable names and numbers in answering your question. b5 is the slope is not a sufficient answer.

• Is the regression equation significant? Give reasons for your answer. (Hint: The answer to this question requires test of the hypothesis: Ho: 1 = 2 = 3 = 4 = 5 = 0 vs. Ha: At least one j is not equal to zero, where j = 1...5)

• Which variables in the current equation are significant and which are not significant? Give reason for your answer. (Hint: The answer to this question requires test of hypothesis: Ho: j = 0 vs. Ha: j 0 for j = 1...5).

• Eliminate all of the insignificant variables and show the final regression equation.

• Considering the original regression equation from a), if you already have an S&P 500 fund in your portfolio, what is the best new asset to place in the portfolio? (Remember, you want your portfolio to be as diverse as possible.) Are there any possible practical limitations to using some of these stocks in a portfolio.


Related Discussions:- Eliminate all of the insignificant variables

Exam, I need to know if the exam will be guarantee to pull my grade up to a...

I need to know if the exam will be guarantee to pull my grade up to a B or an A. I have a D right now so i need to get someone that is willing to put effort on completing it???

#title., Features of index numbers

Features of index numbers

Determine percent of population in city - bayes theoram, (1) Assume we cat...

(1) Assume we categorize voters in a city as havingless educationand those havingmoreeducation. Those with less education have less than a college degree; those with more education

Distribution of sample means, 1. Use the concepts of sampling error and z-s...

1. Use the concepts of sampling error and z-scores to explain the concept of distribution of sample means. 2. Describe the distribution of sample means shape for samples of n=36

Regression, why we use dummy variable

why we use dummy variable

Cluster sampling, Cluster Sampling This method is also known as multi s...

Cluster Sampling This method is also known as multi stage sampling .Under this method random selection is made of the ultimate or final units from a given stratum. The sampling

Graphical calculation for mode, For calculating the mode of the grouped dat...

For calculating the mode of the grouped data graphically, the following procedure is adopted. Draw a histogram of the data; the modal class is the tallest rectangle.

Central tendency and dispersion in statistics, Central Tendency and Dispers...

Central Tendency and Dispersion in Statistics: Write a note on the following : i)    What is the importance of Measures Of Central Tendency and Dispersion in Statistics ?

Deviation measures, Deviation Measures The drawback of the range as a m...

Deviation Measures The drawback of the range as a measure of dispersion is that it takes into account the values of only two data points - the largest and the smallest. One

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd