Values for tests of the following null hypotheses and

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-values for tests of the following null hypotheses, and indicate in each case whether you accept or reject the hypothesis: a) β 1 = 0 b) β 2 = 1 c) the joint hypothesis that β 1 = 0 and β 2 = 1 . 2.) Use the “predict" command with sample speci fi ed to create a series that extends the residuals so that pre-sample values are set to zero. Perform the TR 2 test for omitted second-order serial correlation. Does this lead you to conclude that the errors are serially correlated? Does this lead you to think that your tests of the e cient markets/ constant real interest rate hypothesis are invalid? Hint: be sure to think about what this hypothesis really means before answering. 3.) Perform the TR 2 test for omitted second-order ARCH e ff ects and the TR 2 form of White’s test for omitted general heteroskedasticity. Does this lead you to conclude that the errors are homoskedastic? Does this lead you to think that your tests of the e cient markets/ constant real interest rate hypothesis are invalid? Again please re fl ect on the hint in question (2) before answering. 3
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