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Unformatted text preview: City University of Hong Kong EF3450 Principles of Econometrics Semester A 2005-2006 Midterm Examination (Total score: 70) Full Name: _____________________________ Student ID: _____________________________ Tutorial Time: ___________________________ Do not take away the questions, hand them back together with your answers at the end of the exam. Part I (30 points): Answer all questions in this part. Enter your answer onto the computer answer sheet. 1 By applying the least squares method, which of the following(s) will be minimized? a. The error term. b. The sum of squared residuals.* c. The sum of squared dependent variables. d. The sum of squared of the independent variable. 2. The residual e ˆ of a regression model a. is the deviation of the observed y from the population regression line. b. can be calculated once the estimated coefficients have been obtained. * c. is unobservable unless the true regression coefficients are known. d. None of the above. 3. If the covariance between two variables X and Y is zero, it implies a. X and Y are independent. b. X and Y have no linear relationship. c. The correlation coefficient between X and Y must also be zero. d. Both b and c.* e. All of the above Answer Q4 and Q5 based on the regression output below. The regression is based on the econometric model t t t e x y + + = 2 1 β β : Dependent Variable: Y Method: Least Squares Sample: 1 40 Included observations: 40 Variable Coefficient Std. Error t-Statistic Prob. C 7.590002 0.27774614 27.327 0.0001 X 0.322397 0.01944875 16.577 0.0001 4. Which of the following statements is true ? 1 Paper A a. you should not reject the null hypothesis : 1 = β H against the alternative hypothesis : 1 1 ≠ β H at 1% level of significance. b. you should not reject the null hypothesis 2 : H β ≤ against the alternative hypothesis : 2 1 β H at 1% level of significance. c. The t-statistic for the slope coefficient (16.577) reported in the output table above is for testing whether 2 β is different from zero.* d. None of the above. 5. Which of the following statements is true? a. The degree of freedom of the critical value of the t test is 38. * b. 322397 . , 590002 . 7 2 1 = = β β c. There is strong evidence that 2 β is zero. d. None of the above. 6. Which of the following statements is false ? a. When the variance of the error term ( 2 σ ) increases , the precision with which we can estimate the unknown parameter 2 β decreases ....
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This note was uploaded on 02/22/2009 for the course ECONOMICS 4313 taught by Professor Tsui during the Spring '09 term at HKU.
- Spring '09