ECON 228
Solutions to problem set 5
Problem 1
The extended model has df = 680 9 = 671, and we are testing two restrictions. Therefore,
F = [(0.232 0.229)/(1 0.232)](671/2) 1.31, which is well below the 10% critical value
in the F distribution with 2 and
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Spring 2016 Midterm #2
PLEASE READ: You have 75 minutes to complete the exam. Note the number of points
next to each question and use those points to allocate your time. You must justify all of
your calculations! State the formula you are using, then plug
Spring 2016 Midterm #1
PLEASE READ: You have 75 minutes to complete the exam. Note the number of points
next to each question and use those points to allocate your time. You must justify all of
your calculations! State the formula you are using, then plug
Spring 2016 Midterm #2
PLEASE READ: You have 75 minutes to complete the exam. Note the number of points
next to each question and use those points to allocate your time. You must justify all of
your calculations! State the formula you are using, then plug
Solutions to Spring 2016 Midterm #1
1. (50 points) Present values, future values, and more.
(a) (8 points) In 2015, the annual return on Millaways common stock was 26.5%.
The return in the first quarter was 10.0%, the return in the second quarter was
5.0
Basic Finance HW #6
1. (Good practice for the midterm.) Exactly 60 months ago, you borrowed $400,000 to
buy a new house. Your original mortgage was a 30year fixed rate mortgage offering an APR
of 4.8% with monthly compounding. Today (which is month 0), y
Basic Finance HW #7
1. Savings. You want to set aside some money for your friend Pip.
(a) You have great expectations for Pip and want to give him $250,000 a year for 20 years.
If youre able to lock in an effective annual nominal interest rate of 8%, how
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ECON 228
Problem set 4
This assignment covers what you have learned in Chapter 4 and 5 of the textbook.
The assignment is due on Thursday, April, 10 at 3.00 pm!
Problem 1
Consider an equation to explain salaries of CEOs in terms of annual rm sales, return
ECON 228
Solutions to problem set 4
Problem 1
(i) H0 : 3 = 0, H1 : 3 > 0.
(ii) The proportionate eect on salary is 0.00024(50) = 0.012. To obtain the percentage
eect, we multiply this by 100: 1.2%. Therefore, a 50 point ceteris paribus increase in
ros is
ECON 228
Problem set 5
This assignment covers what you have learned in Chapter 6 and 7 of the textbook.
The assignment is due on Tuesday, April, 29 at 3.00 pm!
Problem 1
We regress the standardized outcome on a nal exam (stndf nl) on percentage of classes
ECON 228
Problem set 3
This assignment covers what you have learned in Chapter 3 of the textbook.
The assignment is due on Thursday, March, 27 at 3.00 pm!
The rst two problems refer to Table 1 below of estimated regressions computed using data
for 1998 fr
ECON 228
Solutions to problem set 3
Problem 1
a. Yes, 5.46 dollars more, on average.
b. Yes, 2.64 dollars more, on average.
c. On average, a worker earns $0.29/hour more for each year he ages.
d. Sallys earnings prediction is 4.40 + 5.48 1 2.62 1 + 0.29 2
ECON 228
Problem set 1
This assignment covers what you have learned in Chapter 1, Appendix B and Appendix
C of the textbook. You must demonstrate your reasoning and show all calculation to receive
full grade.
The assignment is due on Thursday, February, 6
ECON 228
Problem set 1: Solutions
This assignment covers what you have learned in Chapter 1, Appendix B and Appendix
C of the textbook.
The assignment is due on Thursday, February, 6 at 12.00 pm.
Problem 1
(i) Here is one way to pose the question: If two
ECON 228
Problem set 2
This assignment covers what you have learned in Chapter 2 and Appendix C of the textbook.
The assignment is due on Thursday, February, 20 at 3.00 pm.
Problem 1
Let Yl , . . . , Yn be i.i.d. draws from a distribution with mean . A te
ECON 228
Problem set 2: Solutions
This assignment covers what you have learned in Chapter 2 and Appendix C of the textbook.
The assignment is due on ?Thursday, February, 6 at 12.00 pm.
Problem 1
a. No. Because the pvalue is less than 0.05 (= 5%), = 5 is

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Basic Finance HW #4
1. Perpetuities (Old Exam Question). A perpetuity will pay $1000 every two years, with the
first payment arriving in two years. Your savings account pays an APR of 6%, compounded
annually. What is the present value of this perpetuity?
Basic Finance HW #3
1. Compounding Returns and the Time Value of Money (an old exam question).
(a) Last year, stock IOU had monthly returns of 1.0% during January, March, May, June,
August, October, and November. IOU had monthly returns of 2.0% during Feb
Lab 79
* ECC227 Lab 7: Multiple Regression Analysis
* Instructor: Tina Letsou
* March 13, 2017
clear all
set more off
capture log close
cd L:\EC227
log using EC227_Lab7_Log.log, replace
bcuse fringe, clear
* QUESTION: How does schooling affect wage?
* PR
*comments for one line
/* */ comments for multiple lines
webuse auto, clear load the data and clear previous data sets
br browse the data
bcuse open from online
use open from working directory
Stata session
1) Data .dta (you choose where to save)
2) Dofi