12 points 10 E.031 Notes O Ask Your Teac How are returns on common stocks in ove

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12 points 10 E.031 Notes O Ask Your Teac 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 " " 3.25 + 0.819A. Complete the analysis of variance table by filing in the missing boxes. (Round your answer for F to two decimal places and your answers for SS and MS to one decimal place.) DF Source Regression Residual Error Total MS 551.3 10077.1 eBook

Explanation / Answer

Ans:

SS(residual)=10077.1-5551.3=4525.8

MS(regression)=5551.3/1=5551.3

MS(error)=4525.8/19=238.2

F=MS(regression)/MS(error)=5551.3/238.2=23.31

Source DF SS MS F Regression 1 5551.3 5551.3 23.31 Residual 19 4525.8 238.2 Total 20 10077.1

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