Consider the following model of stock prices: Price=Bo + Biearning + ɛ. Where earning is the annual profit per share. Price 65 18 45 32 37 1.5 52 24 27 19 31 Earning 2.35 0.15 1.15 1.1 1.6 1 0.55 0.2 0.4 a. Use the method of OLS to estimate the unknown parameters, Bo and B1. Write the regression equation. b. Calculate SSE, s², s, and and S3, - c. Test for significance of ßi using a=0.05. Interpret the results. d. Construct a 95% confidence interval for B1. Interpret the interval. e. Calculate R? and r. Interpret them and test for significance of correlation coefficient using a-0.05 f. Predict average price of stocks when earning is $2. Construct a 90% confidence interval (prediction interval) for the average price. g. Make a prediction of price of a stock when earning is $2. Construct and interpret a 90% prediction interval
Consider the following model of stock prices: Price=Bo + Biearning + ɛ. Where earning is the annual profit per share. Price 65 18 45 32 37 1.5 52 24 27 19 31 Earning 2.35 0.15 1.15 1.1 1.6 1 0.55 0.2 0.4 a. Use the method of OLS to estimate the unknown parameters, Bo and B1. Write the regression equation. b. Calculate SSE, s², s, and and S3, - c. Test for significance of ßi using a=0.05. Interpret the results. d. Construct a 95% confidence interval for B1. Interpret the interval. e. Calculate R? and r. Interpret them and test for significance of correlation coefficient using a-0.05 f. Predict average price of stocks when earning is $2. Construct a 90% confidence interval (prediction interval) for the average price. g. Make a prediction of price of a stock when earning is $2. Construct and interpret a 90% prediction interval
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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