Assignment2_Template_2011

Assignment2_Template_2011 - associated t-value? 2.269297....

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Finance 271 Financial Modeling & Econometrics Assignment Student ID : G33041692 Each observation in the accompanying dataset contains two numeric variables: Y (the dependent variable) and X (the independent variable), in that order, separated by blanks. For the following questions, assume that these data represent a sample from the population. 1. The lower bound of a 95% confidence interval around the slope is -0.02953. 2. The upper bound of a 95% confidence interval around the slope is 0.293788. 3. Can we be 95% confident that X is linearly related to Y in the population? (NO or YES) NO. Why/why not? According to the textbook, we can use Condifence Interval Approach to hypothesis testing. In this case, we calculated the lower and upper bound on confidence interval around the slope, while zero is contained within the interval. Therefore, it fails to reject H0, to accept HA and to conclude with 95% confident that X is lineary related to Y. 4. When we use a test-of-significance approach to address Question 3, what is the
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Unformatted text preview: associated t-value? 2.269297. 5. When we use a test-of-significance approach to address Question 3, what is the associated p-value? 0.08579 6. Can we be 95% confident that X is positively related to Y in the population? (NO or YES) YES. Why/why not? According to the textbook, we can use Test of Significance Approach to test a directional alternative hypothesis. In this case, we calculated t value is 2.269297, while critical value is tinv(.1,6-2) = 2.131847, t > tinv(.1,6-2). Therefore, it rejects H0, accepts HA and concludes with 95% confident that X is positively related to Y. 7. Suppose we have a new observation whose X value is 3494 and whose Y value is unknown. Based on the results from a linear regression that you conduct, between what two approximate values can we be 95% confident that the Y value of this observation lies? Lower bound: 5181.9903. Upper bound: 6685.1157 8. What is our best estimate of the population coefficient of determination? 0.453534...
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