Tutorial 2
Q1. In class we proved that OLS method ensures that the sample regression function is consistent
with a zero sample covariance between the residuals and the explanatory variable x. Is this a
sensible result? Please discuss.
Q2.
Chapter 2, Probl
Tutorial 5
Note: In all hypothesis testing, please try the three approaches we discussed in class: 1) compare
computed t stat and critical t stat, 2) compare p-value with alpha, 3) check if the confidence interval
include the value of j under the null hyp
Tutorial 6
1. If you put 40 irrelevant independent variables in a regression model, what do you expect the F
test for overall significance and two-tail t test for the individual slope coefficients will be at 5%
level of significance?
2. Chapter 4, Problem
Tutorial 5
1.
2.
Chapter 4, Problem 1
Chapter 4, Problem 2
Hypothesis testing method 2 (Compare p-value with ):
STATA output table gives the p-value of 0.656 for a 2-tail test. So for the 1-tail test, the p-value = 32.8% > =
10%, H0 cannot be rejected at
n
To prove that
^
2
E ) = , i.e.
u^ 2i
i=1
) = 2
n2
E
(for simple regression case)
u^ i= y i ^
0 ^
1 xi
u^ i = ( 0 +
u^ i =
1 x i + ui ) ^0 ^
1 x i
1
1
+ ui
x
( ^
0 0 )^
(1)
Average eqt (1) across all observations in your sample:
n
n
1
1
u^ i = ( ^
0
Tutorial 2
Q1. Yes. This means in applying OLS we need to fit the sample regression line to the data until
the residuals contain no information on the explanatory variable x ( having zero sample
covariance). This is a sensible property since we want to kn
The University of Hong Kong
School of Economics and Finance
FINA0104/FINA2331Management of Commercial Banks
Assignment 3
Due: November 17, 2016
1. Suppose an entrepreneur, Mr. Wong, who knows at t = 0 that he will have available
at t = 1 an opportunity to
Tutorial 1
Chapter 1, Problem 1
Chapter 1, Problem 2
Chapter 1, Problem 3
Chapter 2, Problem 1
Chapter 2, Problem 3 (use STATA to obtain the estimates, and verify by using the OLS formula)
Chapter 2, Computing Exercises C2
Tutorial 10
1. Assignment 2 and 3 questions
2. Chapter 10, Computer exercise C2*
3. Chapter 10, Computer exercise C5*
* As the last tutorial will not be held in a lab, Eric will show you the STATA output.