Compute the least squares regression line

Assignment Help Financial Management
Reference no: EM131231657

Attach the data set SHIP (or ship) included in the standard S-Plus distribution package, and make sure that the data are stored in a vector. Use the command:
> SHIP

if needed. Create a vector TIME containing the integers ranging from 1 to the number of entries in the vector SHIP.

1. Compute the least squares regression line and the least absolute deviations regression line of SHIP versus TIME and superimpose these two lines onto the scatterplot of TIME and SHIP. Compare the ways in which these lines account for the upward trend in the data and explain the differences

2. The purpose of this question is to fit a more general polynomial (i.e. of degree possibly greater than 1) to the SHIP data. Perform polynomial regressions of degrees 2, 4, 6, and 8 successively, plot the results, and choose the value of the degree which seems the most reasonable.

3. The purpose of this question is to use natural splines to smooth the data SHIP. Vary the number of degrees of freedom (i.e. the parameter df). Use the values 2, 6, 10, 14 and 18 for the number of degrees of freedom (i.e. the parameter df) and for each of them fit a natural spline to the data. Explain how the smoothed curve changes with the value of the number of degrees of freedom and choose the one which seems the most reasonable.

4. Finally we smooth the SHIP data using a kernel smoother ksmooth with a normal kernel function. Use the values 1, 5, 20, 50 and 125 for the bandwidth, and for each of these values, superimpose the graph of the kernel scatterplot smoother on the actual scatterplot of the original data. Explain how the smoothed curve changes with the bandwidth.

Reference no: EM131231657

Questions Cloud

Perform a least squares linear regression : Perform a least squares linear regression of the second column on the first one and assess the significance of the regression.
Discuss some of the benefits of providing wireless access : Discuss some of the benefits of providing wireless access in one or more of the following situations: a large company offering wireless connectivity to its employees, a coffee shop offering wireless connectivity to customers, a small company offering..
What investments are required to grow globally : What investments are required to grow globally? How vulnerable is a firm if it elects not to make a move into the global environment?
Estimate the doubling time of the human population : The Earth is approximately two-thirds water and can be approximated as a sphere of 8000 mi in diameter. Then, discuss the implications for these estimates.
Compute the least squares regression line : Compute the least squares regression line and the least absolute deviations regression line of SHIP versus TIME and superimpose these two lines onto the scatterplot of TIME and SHIP.
What is the total power consumed at any given moment : If you were willing to pay the utility company $5, what would be the power rating of an additional appliance you could add to your study space?
What other variables might be influencing this relationship : Do the results provide sufficient evidence to support the alternative hypothesis? Was the sample appropriate for this study? Explain your answer. What are some possible limitations to this study?
Based on the module reading assignment : Based on the module reading assignment, describe the problem solving process. Be sure to include the eight step creative problem solving process. How does the eight step process relate to your own method of solving problems?
Give proof for a general kernel function : Choose one of the four kernel functions given in the text (pick your favorite) or try to give this proof for a general kernel function if you feel comfortable enough.

Reviews

Write a Review

Financial Management Questions & Answers

  Index of potential derivatives instruments in portfolio

Assume that you are the hedge fund portfolio manager and are starting a new fund. You have received $1 million to invest in a portfolio of derivatives. You should invest at least 20% in each of options, futures, and derivatives. No one position may c..

  General cash offering to raise the needed funds

The Dunning Co. needs to raise $66.9 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. What are the required proceeds from the sale necessary for the c..

  What is present value of this cash flow pattern

You have been offered the opportunity to invest in a project that will pay $5024 per year at the end of years one through three and $13872 per year at the end of years four and five. If the appropriate discount rate is 18.12 percent per year, what is..

  Prepare next years financial plan and operational budget

Prepare next year's financial plan and operational budget. How the new services will impact revenue. Increase in revenue reimbursement.

  The annuitant can never outline the annuity payments

One feature that all annuity contracts have in common is that the annuitant can never outline the annuity payments. Risky investments always perform better than less risky investments over a five-year period. Generally, investments that have the pote..

  The projects net present value

Calculate the NPV for a 25 year project with an initial investment of 40000 and a cash inflow of 6000 per year. Assume that the firm has an opportunity cost of 18% . Comment on the acceptability of the project

  Invest rate would his investment have to earn to achieve

Michael Harper has $3,000 to invest for three years. He wants to receive $5,000 at the end of the three years. What invest rate would his investment have to earn to achieve his goal?

  About the future value

Calculate how much you would have in 10 years if you saved $3,500 a year at an annual rate of 6 percent with the company contributing $875 a year. Use Exhibit 1-B.

  Business of internet service to evaluate this new venture

The Moore, Inc. is a residential and commercial internet service provider. Now it is considering expanding into a new line of business: 3-D printer. Currently, Moore has an effective tax rate of 40% and equity to debt ratio is 1.5. What would happen ..

  Total operating costs at his operating breakeven point

John has a business that manufactures golf tees made of rubber. he nelieves these sell. His first step is to determine the level of sales he must have to break even with his new venture. how many packs should he sell to at least hit his operating bre..

  What is the firms effective cost of borrowing

Company has an average collection period of 34 days and factors all of its receivables immediately at a 3.1 percent discount. Assume all accounts are collected in full. What is the firm's effective cost of borrowing? Identify which of the following w..

  Use duration to estimate the new price of the bond

Consider a 5.6 percent coupon bond with ten years to maturity and a current price of $1,057.70. Suppose the yield on the bond suddenly increases by 2 percent. a. Use duration to estimate the new price of the bond. b. Calculate the new bond price.

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