Reference no: EM131088136
1. In Example 10.4, we saw that our estimates of the individual lag coefficients in a distrib- uted lag model were very imprecise. One way to alleviate the multicollinearity problem is to assume that the djfollow a relatively simple pattern. For concreteness, consider a model with four lags:
yt5a0 1d0 zt1d1 zt21 1d2 zt22 1d3 zt23 1d4 zt24 1ut.
Now, let us assume that the djfollow a quadratic in the lag, j:
dj5 g01 g1j1 g2j2,
for parameters g0, g1, and g2. This is an example of a polynomial distributed lag(PDL) model.
1. Plug the formula for each djinto the distributed lag model and write the model in terms of the parameters gh, for h5 0,1,2.
2. Explain the regression you would run to estimate the gh.
3. The polynomial distributed lag model is a restricted version of the general model. How many restrictions are imposed? How would you test these? ( Hint:Think Ftest.)
What is the duration of this bond
: A bond currently sells for $1,080, which gives it a yield to maturity of 7%. Suppose that if the yield increases by 50 basis points, the price of the bond falls to $1,050. What is the duration of this bond?
|
What is the current price of the bonds
: ABC Corporation issued 20-year, noncallable, 7.4% annual coupon bonds at their par value of $1,000 one year ago. Today, the market interest rate on these bonds is 6.5%. What is the current price of the bonds, given that they now have 19 years to matu..
|
Discuss the pros and cons of central banks setting policy
: Why don't policymakers want to adopt rules for monetary policy?
|
Customer division or departmentation
: There are three major forms of divisional structures: product division, geographic division and customer division. Which of the following statements is not true about Customer Division or Departmentation?
|
Explain the regression you would run to estimate the gh
: The polynomial distributed lag model is a restricted version of the general model. How many restrictions are imposed? How would you test these? ( Hint:Think Ftest.)
|
Why does a distributor or retailer hold inventory
: Why does a distributor or retailer hold inventory? Identify up to five reasons for this behaviour in the supply chain.
|
Prepare lost profit analysis to support its insurance claim
: UCSSI has an insurance policy that would pay for up to 1 year's worth of lost profits as a result of the fire. UCSSI has engaged you to prepare a lost profit analysis to support its insurance claim
|
Riverbend city-debriefing and cost effectiveness
: Research and review the Riverbend City: Shelter and Nursing Home Debriefing Mission,address the following in your assignment:
|
Develop multiple talent pools and career paths
: Research an organization--searchable through the internet--and make an assessment of all ten of its key factors involved in successful talent planning and development listed below. Develop an action plan on any solutions to improve areas of concer..
|