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 the years 1984 to 2014. Here is part of the output for this regression. The regression equation is B = - 3.23 + 0313 A. (Round your answers to four decimal places.) What is the value of the regression standard error s? s = What is the value of the squared correlation r^2? r^2 =

Explanation / Answer

Regression standard error s = sqrt [ MSE] = sqrt [161.7] = 12.716 [Here MSE = 161.7 ]

Squared correlation r2 = SSregression / SSTotal = 5551.7/ 10078.7 = 0.5508

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