How are returns on common stocks in overseas markets related to returns in one c
ID: 3299124 • Letter: H
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 1989 to 2014. Here is part of the output for this regression. The regression equation is B = 3.13 + 0.823A. 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 5551.7 ______ _____ Residual Error _____ ______ _____ Total ____ 10077.5Explanation / Answer
Total d.f. = n - 1, where, n = number of observations i.e. in this case it is the number of years from 1989 to 2014 i.e. n = 26.
Thus, total d.f. = 26 - 1 = 25.
d.f. of regression = 1.
Thus, error d.f. = 25 - 1 = 24. (Ans).
TSS = 10077.5, SSReg = 5551.7
Thus, SSError = TSS - SSReg = 10077.5 - 5551.7
= 4525.8. (Ans).
MSReg = SSReg / d.f. of regression = 5551.7/1
= 5551.7. (Ans).
MSError = SSError / d.f. of error = 4525.8 / 24
= 188.575. (Ans).
F = MSReg / MSError = 5551.7 / 188.575 = 29.44. (Ans).
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.