Quantitative analysis, Financial Management

A researcher develops a regression model to understand how student-to-teacher ratios affect test scores. The researcher theorizes that age, gender, and race do not impact test scores. However, a discussion with his colleagues reveals other factors could be important. As such, a second model is constructed. In this model, an additional explanatory variable reflecting the percent of classrooms with at least eight computers (PctComputer) is added.

The results are as follows:

TestScore = 698.9 - 2.28 STR

and

TestScore = 698.0 - 1.10 STR - 0.65 PctComputer

(1) Explain why you think the coefficient on the student-teacher ratio has changed so dramatically (been more than halved). Be very thorough and clearly explain important considerations.

(2) What potential problems exist in this analysis?

Show all work and calculations.

Posted Date: 2/26/2013 12:23:13 AM | Location : United States







Related Discussions:- Quantitative analysis, Assignment Help, Ask Question on Quantitative analysis, Get Answer, Expert's Help, Quantitative analysis Discussions

Write discussion on Quantitative analysis
Your posts are moderated
Related Questions
a) Define monetary policy, and discuss the operation of monetary policy in the United States post-GFC.

Taxonomy of financial intermediaries We start by looking at the USA, the largest economy and financial system in the world. Subsequently we will turn to other countries. In the

Portfolios are simply combinations of different securities. The characteristics of investments do differ when we possess them in combinations or portfolios. As we shall see, an ass

You must analyze the operating performance of your company. You will use ratio analysis and primarily using Liquidity, Profitability and Working Capital ratios. You will use a g

How do opportunity costs affect the capital budgeting decision-making process? Opportunity costs reflect the foregone advantages of the alternative not chosen when a capital bu

Compare and contrast the book value and liquidation value per share for common stock. Is one method more reliable? Explain. The Book Value of a firm's common stock is institute

How would you explain transaction exposure? How is it different from economic exposure? Answer:Transaction exposure is the sensitivity of comprehend domestic currency values of

Q. Show the Supposition of MM Hypothesis? Supposition of MM Hypothesis:- (i) There are ideal capital markets. (ii) Investors act rationally. (iii) Information regardin

Exit strategy Venture capitalists and other financiers will negotiate an exit strategy at the point of advancing the money. The exit strategy will involve them realising their