Reference no: EM131319371
1. Recall the model for a simple linear regression: where is Normally distributed with mean 0 and variance , where Cov( ) = 0 for all i, j and Cov( = 0 for all i,j.A day trader wishes to develop a prediction model for a given stock based on the time of day. Each hour the stock market is open for a period of 30 days, the trader collects the following data; Yi = the current stock price and Xi = the time of day. At the end of 30 days the trader runs a simple linear regression on Yi versus Xi and obtains the desired prediction model. What possible mistakes might the day trader have made in conducting this regression analysis?
2. In the simple linear regression model (see above), the are the error terms. That is, the deviations of the actual Yi values from the predicted values using the true regression line. The residuals or values are the deviations of the actual Yi values from estimated regression line. That is. Calculate.
3. Consider the following data: X = Median diameter of granules of sand in (mm)
Y = The gradient of the beach slope in (degrees). Obtain the simple linear regression of Y on X.
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X =
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0.170
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0.190
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0.220
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0.235
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0.235
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0.300
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0.350
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0.420
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0.850
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Y =
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0.630
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0.700
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0.820
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0.880
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1.150
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1.500
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4.400
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7.300
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11.300
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a. Find a 95% confidence interval for
b. Find a 95% confidence interval for β
4. Using the simple linear regression equation of problem 3. Find use this to prepare a 95 % confidence interval for E[
5. Use the results of the simple regression obtained in problem 3 to compute:
a. The sample covariance between (X and Y)
b. The sample correlation coefficient between X and Y
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Sample standard deviation for data
: The number of accidents occurring per week at a dangerous intersection, recorded over a period of 6 weeks are, 2, 1, 6, 5, 1, 3. What is the sample standard deviation for this data?
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Result in additional cash flows
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Compute price of put with same strike and expiration date
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Population variance of the number of children
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Simple linear regression equation of problem
: Using the simple linear regression equation of problem 3. Find use this to prepare a 95 % confidence interval for E[. Use the results of the simple regression obtained in problem 3 to compute:
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Reject accept at what level of pretax cost savings
: Your firm is contemplating the purchase of a new $545,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $53,000 at the end of that time. The tax rate is 34 percent a..
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How long are typical email addresses
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Describe failed enterprise resources planning implementation
: Describe both a failed Enterprise Resources Planning implementation and a success story of a firm that has successfully implemented an Enterprise Resources Planning system.
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Write your critique in standard essay form
: discusses project risks and its implications to failure. Identify how lack of vendor (procurement processes) and quality processes led to increased negative risks that ultimately impacted this project. Explain the negative and positive risk plans.
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