In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The rate oreturn on Apex was rA = 3.7%. The rate of return on Bpex was only rg = 3.3%. The market today responded to very encouraging newabout the unemployment rate, and M = 3.4%. The historical relationship between returns on these stocks and the market portfolio hasbeen estimated from index model regressions as:Apex: A = 0.3% + 1.5PMBpex: rg = -0.1% + 0.5rM.Required:a. What is the predicted returns for Apex & Bpex?b. Which company do you think won the lawsuit?Complete this question by entering your answers in the tabs below.Required A Required BWhat is the predicted returns for Apex & Bpex?Note: Do not round intermediate calculations. Round your answers to 1 decimal place.ApexВрехPredicted Returns%%

Index model regression:- An asset pricing model that assesses the risks and returns of a security is…

In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The ra return on Apex was rA = 3.7%. The rate of return on Bpex was only rg = 3.3%. The market today responded to very encouraging about the unemployment rate, and M = 3.4%. The historical relationship between returns on these stocks and the market portfolio been estimated from index model regressions as: Apex: A = 0.3% + 1.5PM Bpex: rg = -0.1% + 0.5rM. Required: a. What is the predicted returns for Apex & Bpex? b. Which company do you think won the lawsuit?

In a recent closely contested lawsuit, Apex sued Bpex for patent infringement. The jury came back today with its decision. The ra return on Apex was rA = 3.7%. The rate of return on Bpex was only rg = 3.3%. The market today responded to very encouraging about the unemployment rate, and M = 3.4%. The historical relationship between returns on these stocks and the market portfolio been estimated from index model regressions as: Apex: A = 0.3% + 1.5PM Bpex: rg = -0.1% + 0.5rM. Required: a. What is the predicted returns for Apex & Bpex? b. Which company do you think won the lawsuit?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose you run the following regression: outcome=alpha0 + alpha1*female + alpha2*married + epsilon. You know that female equals 1 for females and 0 otherwise. You know that married equals 1 if the person is married and 0 otherwise. What is the estimated outcome for married respondents who are not female?
The regression table from STATA and the table that I created by looking at the values from STATA are attached. Question: Run a separate regression for each measure of social preferences (risk-taking, patience, trust) and compare whether subjective measures of individual’s math skills, their gender and age are important determinants. Summarize the results of the regressions in a table (each column representing one regression). Interpret the estimated coefficients and provide an intuition of what you have found out.
Economics: Industrial Economics Since only 3 questions allowed = Please Answer Parts D. - F. (and include answers to the NOTE PART: sub-questions a.; b.; c. In order to solve the Parts D. - F. questions). Thanks QUESTION: You work for the manager of a small single-product firm. Assume that you have data for your firm on costs, capital rental rate, wages and output. You realize through regression analysis that the data fits very well the following equation: ln(C) = -1.18 + 0.33 ln(r) + 0.67 ln(w) + 0.81 ln(q) D. Explain why its very likely that you misspecified the production technology. To account for the possibility of having misspecified the production function, you run a more general regression using the data for all firms. The data fits the following equation: ln(C) = 1 + 0.33 ln(r) + 0.67 ln(w) + 0.3 ln(q) + 0.03[ln(q)]^2 E.Assuming that w = 25 and r = 500, complete the following table (in excel): q ln(q) ln(C) C AC MC 1,000 2,000 5,000 10,000 20,000 50,000 100,000 200,000…
Economics Help: Please see attached. Which one is correct?
Consider the simple two-variable linear regression model y₁ = Bo + Bixi + e¡ with unknown parameters Boand B₁ and s, is the unobserved random error term. The corresponding OLS regression equation for the above model is: 9 = Bo + B₁x + ₁, where hats indicated estimates of the coefficients and residuals. Given this information, what is the OLS criterion? a. min Σ. ΣΤΟ -1) b. min E *Σ(βο + β1x.) c. min E ê-E-Bo + B₂x₁) d. min ΣτêΣΟ - β - β,x) e. min Σ€ΣΟ - β) a b Oc Od
What is the advantage of using the option ",robust" when running a regression in Stata? (Hint: mention an OLS assumption in your answer)
Using data from a random sample of 1000 working adults, we obtain the following estimated regression to study the effect of experience (exper) on log of wage (log(wage)). log(wage) = 5.423 -0.034ezper +0.009ezper² + 0.082educ + 0.157male What other regression do you need to run to test the null hypothesis that, holding other factors fixed, experience has no effect on log(wage)? Explain what test you would perform.
Just number 3 please thankyou
In general, what is true about the relationship between the Sum of Squared Residuals in the restricted and unrestricted model? a. SSRr = R-squared * SSRur b. SSRr < SSRur c. SSRr > SSRur d. SSRr = SSRur
Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be $165,000. Variable processing costs are estimated to be $5 per book. The publisher plans to sell single-user access to the book for $44. Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand price of the e-book. (b) Use Goal Seek to calculate the price (in dollars) that results in breakeven. (Round your answer to the nearest cent.) = (a) Construct an appropriate spreadsheet model for calculating the profit/loss at a given single-user access price taking into account the above demand function. What is the profit estimated by your model for the given costs and single user access price (in dollars). $ 3736 X (c) Use a data table that varies price from $50 to $400…
General Cereals is using a regression model to estimate the demand for Tweetie Sweeties, a whistle-shaped, sugar-coated breakfast cereal for children. The following (multiplicative exponential) demand function is being used: QD= 6,280 P 1.35) 42.05 N 2.70 where QD quantity demanded, in 10-oz boxes P = price per box, in dollars A = advertising expenditures on daytime television, in dollars N = proportion of the population under 12 years old, in percent What is the point price elasticity of demand for Tweetie Sweeties? O 2.70 O 2.05 -0.66 -1.35 What is the advertising elasticity of demand? -1.35 O 2.70 O 0.76 O 2.05 According to the estimated model, a percent increase in the proportion of the population under 12 years old by percent. the quantity demanded
Given the estimated multiple regression equation ŷ = 6 + 5x1 + 4x2 + 7x3 + 8x4 what is the predicted value of Y in each case? a. x1 = 10, x2 = 23, x3 = 9, and x4 = 12 b. x1 = 23, x2 = 18, x3 = 10, and x4 = 11 c. x1 = 10, x2 = 23, x3 = 9, and x4 = 12 d. x1 = -10, x2 = 13, x3 = -8, and x4 = -16