1. The Following data is given for the period 1999-2003 Interest rate Inflation i 1999 2000 4.7 4.4 4.6 5.4 2001 6.3 5.7 2002 4.8 4.6 2003 2.9 2.4 a. According to Fisher Equation "a rise in inflation also rises the nominal interest rate by the same amount". Construct a regression model by determining dependent and independent variables according to this theory. b. Obtain residuals of the regression. Calculate variance of the residuals and the standard errors of the parameters (15 p) (note: use the table above for calculations, just write down the final results here). c. Test significance of the slope parameter (the parameter of the independent variable) at 5% significance level. Is it in line with the proposition?

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Please answer the question parts A, B and C given based on the example i provided. thank you in advance.

1. The Following data is given for the period 1999-2003
www
Interest
rate
Inflation
1999
4.7
4.4
2000
4.6
5.4
2001
6.3
5.7
2002
4.8
4.6
2003
2.9
2.4
a. According to Fisher Equation "a rise in inflation also rises the nominal interest rate by the same
amount". Construct a regression model by determining dependent and independent variables
according to this theory.
b. Obtain residuals of the regression. Calculate variance of the residuals and the standard errors of the
parameters (15 p) (note: use the table above for calculations, just write down the final results here).
c. Test significance of the slope parameter (the parameter of the independent variable) at 5%
significance level. Is it in line with the proposition?
d. Evaluate the overall significance of the model with R? and F test.
wwww
Transcribed Image Text:1. The Following data is given for the period 1999-2003 www Interest rate Inflation 1999 4.7 4.4 2000 4.6 5.4 2001 6.3 5.7 2002 4.8 4.6 2003 2.9 2.4 a. According to Fisher Equation "a rise in inflation also rises the nominal interest rate by the same amount". Construct a regression model by determining dependent and independent variables according to this theory. b. Obtain residuals of the regression. Calculate variance of the residuals and the standard errors of the parameters (15 p) (note: use the table above for calculations, just write down the final results here). c. Test significance of the slope parameter (the parameter of the independent variable) at 5% significance level. Is it in line with the proposition? d. Evaluate the overall significance of the model with R? and F test. wwww
Y = Bi + B2 X; + UF
(xr-x)」(-) (xF-)&i-ス).(yF-)
3r
1.11. 8
E-0,35
-০
O, 1215
0,13125
2, 883
-0, 83
9 Co69o, I66
4.GI
1.
2.4
-0.05
O, 215
5,76
3.4
0, obas
70, ol1a5
O. 267
0,0H1
a 0506
3.133
3
1.6
3
O,15
-0, 195
0,0125
0,09
0.031
-0,02615
3.3
-Q 3
14
1.7
2.45
3,5
0,05
o, 315
O, 0625
A, 29
Aurope
0, 08125
O, I167
,0136
0,1056
3, 383
3.195
Sum
0,21
0,175
o, 1ối 67 0.3275
14,22
Exi
2. I +2. 4+2.b+2.7
= 2,u5
255
す。 2.8+3.4+343 , 3.175
yr-,133+ 9 83 xT+Gi
O, 18167
= Q0 9o8
n-と
u- 2
-三(xr-ス) y-5)
0,175
%3D
9r - 1,133+4 23x1,4
= 0,83
0.21
る.- 5-x= 3,195-0,83x2,05= 4,133
TSS = ESS
+ 255
How it interpret
Exploined wiables con exploined u4.5 chope in the dependent
ESS
» 1-0, 18 164
O, 3275
O, u45
TSS
TSS
rables
A Agustos
Transcribed Image Text:Y = Bi + B2 X; + UF (xr-x)」(-) (xF-)&i-ス).(yF-) 3r 1.11. 8 E-0,35 -০ O, 1215 0,13125 2, 883 -0, 83 9 Co69o, I66 4.GI 1. 2.4 -0.05 O, 215 5,76 3.4 0, obas 70, ol1a5 O. 267 0,0H1 a 0506 3.133 3 1.6 3 O,15 -0, 195 0,0125 0,09 0.031 -0,02615 3.3 -Q 3 14 1.7 2.45 3,5 0,05 o, 315 O, 0625 A, 29 Aurope 0, 08125 O, I167 ,0136 0,1056 3, 383 3.195 Sum 0,21 0,175 o, 1ối 67 0.3275 14,22 Exi 2. I +2. 4+2.b+2.7 = 2,u5 255 す。 2.8+3.4+343 , 3.175 yr-,133+ 9 83 xT+Gi O, 18167 = Q0 9o8 n-と u- 2 -三(xr-ス) y-5) 0,175 %3D 9r - 1,133+4 23x1,4 = 0,83 0.21 る.- 5-x= 3,195-0,83x2,05= 4,133 TSS = ESS + 255 How it interpret Exploined wiables con exploined u4.5 chope in the dependent ESS » 1-0, 18 164 O, 3275 O, u45 TSS TSS rables A Agustos
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