1. We are interested in estimating the factors that affect CEO's salary. We con-struct the following model,log(salary) = Bo + Bị log(sales) + Baroe + Baroe?(1)Using the data in RDCHEM.RAW, the following equation was obtained byOLS:log(salary) = 4.322 + 0.276 log(sales) + 0.0215roe – 0.00008roe?,%3D(0.324) (0.033)(0.0129)(0.00026)n = 32,R = 0.1484(a) At what point does the marginal effect of roe on log(salary) become neg-ative?(b) Suppose we want to test the null hypothesis that roe is linearly related tolog(salary) against the alternative that the relationship is quadratic at 5%level, state the null hypothesis and alternative hypothesis in terms of theparameter in equation (1).(c) Test the null hypothesis in part (b). Be sure to specify the null and al-ternative hypothesis, the test statistics, the degree of freedom, and thecritical value.(d) Based on your answer in part (c), do you think including the quadraticterm in equation (1) is necessary? Explain why or why not.

Name: 1. We are interested in estimating the factors that affect CEO's sala
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Description: 1. We are interested in estimating the factors that affect CEO's salary. We con-struct the following model,log(salary) = Bo + Bị log(sales) + Baroe + Baroe?(1)Using the data in RDCHEM.RAW, the following equation was obtained byOLS:log(salary) = 4.32

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1. We are interested in estimating the factors that affect CEO's salary. We con- struct the following model, log(salary) = Bo + B1 log(sales) + B2roe + Baroe? (1) Using the data in RDCHEM.RAW, the following equation was obtained by OLS: log(salary) = 4.322 +0.276 log(sales) + 0.0215roe - 0.00008roe, (0.324) (0.033) (0.0129) (0.00026) n = 32, R = 0.1484

1. We are interested in estimating the factors that affect CEO's salary. We con- struct the following model, log(salary) = Bo + B1 log(sales) + B2roe + Baroe? (1) Using the data in RDCHEM.RAW, the following equation was obtained by OLS: log(salary) = 4.322 +0.276 log(sales) + 0.0215roe - 0.00008roe, (0.324) (0.033) (0.0129) (0.00026) n = 32, R = 0.1484

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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