Reference no: EM13881888
In a study of turnover in the labor market, James F. Ragan, Jr., obtained the following results for the U.S. economy for the period of 1950-I to 1979-IV.* (Figures in the parentheses are the estimated t statistics.)
l^n Yt = 4.47 - 0.34 ln X2t + 1.22 ln X3t + 1.22 ln X4t+ 0.80 ln X5t - 0.0055 X6t
(4.28) (-5.31) (3.64) (3.10) (1.10) (-3.09)
R¯ 2 = 0.5370
Note: We will discuss the t statistics in the next chapter.
where Y = quit rate in manufacturing, de?ned as number of people leav- ing jobs voluntarily per 100 employees
X2 = an instrumental or proxy variable for adult male unemploy- ment rate
X3 = percentage of employees younger than 25
X4 = Nt-1 / Nt-4 = ratio of manufacturing employment in quarter (t - 1) to that in quarter (t - 4)
X5 = percentage of women employees
X6 = time trend (1950-I = 1)
a. Interpret the foregoing results.
b. Is the observed negative relationship between the logs of Y and X2 jus- ti?able a priori?
c. Why is the coef?cient of ln X3 positive?
d. Since the trend coef?cient is negative, there is a secular decline of what percent in the quit rate and why is there such a decline?
e. Is the R¯ 2 "too" low?
f. Can you estimate the standard errors of the regression coef?cients from the given data? Why or why not?
|
How might you plan strategically for its diffusion
: You are the marketing manager for a brand that has developed a discontinuous innovation. What issues should you consider as part of your plans for this product's adoption?
|
|
Identify the buyer and seller of the option
: A bank buys a five year maturity GNMA bond that is callable at par after one year, yielding 6.88 percent. The matched duration zero coupon Treasury rate is 6.11 percent. A bank buys an FHLB pass through MBS at par yielding 7.47 percent. The matched d..
|
|
Forge effective relationships to achieve meeting objectives
: Adhere to organisations social, ethical and business standards and Deal with people openly and fairly?
|
|
Estimate the breakeven ror values from both graphs
: Plot two graphs: PW versus i values for both alternatives' cash flows and PW versus _i values for incremental cash flows. Estimate the breakeven ROR values from both graphs, and use this estimate to select one alternative.
|
|
Why is the coef?cient of ln x3 positive
: Since the trend coef?cient is negative, there is a secular decline of what percent in the quit rate and why is there such a decline?
|
|
Why will total return rise when rates fall
: Suppose that you own a callable U. S. agency bond like that in Exhibit 16.9. Explain why your total return will fall when interest rates rise. Identify changes in return associated with each component of total return. Why will total return rise when ..
|
|
Producing a leak whose volumetric flow rate
: At that point, inlet flow rate wt is adjusted so that the level remains constant. However, on this particular day, corrosion of the tank has opened up a hole in the wail at a height of 1 m, producing a leak whose volumetric flow rate q4 (m3/min) c..
|
|
Determine the incremental cash flow effects
: Determine the incremental cash flow effects for the bank if it sold the Treasury note and reinvested the full after tax proceeds from the sale in a 6.6 percent three year taxable security, assuming a 34 percent tax rate.
|
|
Determine the incremental cash flow effects
: Suppose that the above bank also owns a $ 1 million par value Treasury bond, purchased at par, with two years to maturity, paying $ 29,000 in semiannual interest, with a market value of $ 960,000. Determine the incremental cash flow effects if the ba..
|