How are returns on common stocks in overseas markets related to returns in one c

Question

How are returns on common stocks in overseas markets related to returns in one countries markets? Consider measuring the countries returns by the annual rate of return on the index A and overseas returns by the annual rate of return on index B. Both are recorded in percents. We will regress the B returns on the A returns for 21 years. Here is part of the output for this regression. The regression equation is

B = ?3.17 + 0.815A.

Complete the analysis of variance table by filling in the missing boxes. (Round your answer for F to two decimal places and your answers for SS and MS to one decimal place.)

Analysis of Variance Source DF SS MS F Regression 1 5552.5 Residual Error Total 10078.7

Explanation / Answer

for total number of years =21

hence df total =21-1=20

and df for residual =n-2=21-2=19

also as MS =SS/df

F =MS(regression)/MS(error)

from above :

source df SS MS F regression 1 5552.5 5552.5 23.31 residual 19 4526.2 238.2 total 20 10078.7

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