Homework Help is Here – Start Your Trial Now!
Math
Statistics
Two new variables, the market value of the firm (a measure of firm size, in millions of dollars) and stock return (a measure of firm performance, in percentage points), are added to the regression: If MarketValue increases by 1.49%, what is the increase in earnings? If Market Value increases by 1.49%, earnings increase by .55 % The coefficient on Female is now -0.28. Why has it changed from the first regression? In(Earnings) = 3.86-0.28Female + 0.37In (MarketValue) + 0.004 Return, (0.03) (0.04) (0.004) (0.003) n = 46,670, R² = 0.345. O A. MarketValue is important for explaining In(Earnings). OB. The first regression suffered from omitted variable bias. OC. Female is correlated with the two new included variables. OD. All of the above. ou Let X = Female, u = MarketValue, and Assume that the coefficient estimated in the second regression is correct. Forget about the effect of the Return variable, whose effect seems small and statistic insignificant. Calculate the correlation between Female and In(MarketValue) using the omitted variable bias equation. ox = 0.48. (Round your response to two decimal places.) The correlation between Female and In(MarketValue), Pxu, is (Round your response to three decimal places.)

Two new variables, the market value of the firm (a measure of firm size, in millions of dollars) and stock return (a measure of firm performance, in percentage points), are added to the regression: If MarketValue increases by 1.49%, what is the increase in earnings? If Market Value increases by 1.49%, earnings increase by .55 % The coefficient on Female is now -0.28. Why has it changed from the first regression? In(Earnings) = 3.86-0.28Female + 0.37In (MarketValue) + 0.004 Return, (0.03) (0.04) (0.004) (0.003) n = 46,670, R² = 0.345. O A. MarketValue is important for explaining In(Earnings). OB. The first regression suffered from omitted variable bias. OC. Female is correlated with the two new included variables. OD. All of the above. ou Let X = Female, u = MarketValue, and Assume that the coefficient estimated in the second regression is correct. Forget about the effect of the Return variable, whose effect seems small and statistic insignificant. Calculate the correlation between Female and In(MarketValue) using the omitted variable bias equation. ox = 0.48. (Round your response to two decimal places.) The correlation between Female and In(MarketValue), Pxu, is (Round your response to three decimal places.)

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
See similar textbooks
icon
Related questions
Question
Two new variables, the market value of the firm (a measure of firm size, in millions of dollars) and stock return (a measure of firm performance, in percentage points), are added to the regression: In(Earnings) = 3.86 -0.28Female + 0.37In(MarketValue) + 0.004 Return, (0.03) (0.04) (0.004) (0.003) A. MarketValue is important for explaining In (Earnings). B. The first regression suffered from omitted variable bias. C. Female is correlated with the two new included variables. D. All of the above. If Market Value increases by 1.49%, what is the increase in earnings? If Market Value increases by 1.49%, earnings increase by .55 % The coefficient on Female is now -0.28. Why has it changed from the first regression? n = 46,670, R² %u Let X = Female, u = MarketValue, and - = 0.48. x = 0.345. The correlation between Female and In(MarketValue), pxu, is Assume that the coefficient estimated in the second regression is correct. Forget about the effect of the Return variable, whose effect seems small and statistically insignificant. Calculate the correlation between Female and In(MarketValue) using the omitted variable bias equation. (Round your response to two decimal places.) . (Round your response to three decimal places.)
Transcribed Image Text:Two new variables, the market value of the firm (a measure of firm size, in millions of dollars) and stock return (a measure of firm performance, in percentage points), are added to the regression: In(Earnings) = 3.86 -0.28Female + 0.37In(MarketValue) + 0.004 Return, (0.03) (0.04) (0.004) (0.003) A. MarketValue is important for explaining In (Earnings). B. The first regression suffered from omitted variable bias. C. Female is correlated with the two new included variables. D. All of the above. If Market Value increases by 1.49%, what is the increase in earnings? If Market Value increases by 1.49%, earnings increase by .55 % The coefficient on Female is now -0.28. Why has it changed from the first regression? n = 46,670, R² %u Let X = Female, u = MarketValue, and - = 0.48. x = 0.345. The correlation between Female and In(MarketValue), pxu, is Assume that the coefficient estimated in the second regression is correct. Forget about the effect of the Return variable, whose effect seems small and statistically insignificant. Calculate the correlation between Female and In(MarketValue) using the omitted variable bias equation. (Round your response to two decimal places.) . (Round your response to three decimal places.)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 4 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
Probability and Statistics for Engineering and th…
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
Statistics for The Behavioral Sciences (MindTap C…
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
Elementary Statistics: Picturing the World (7th E…
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
The Basic Practice of Statistics
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
Introduction to the Practice of Statistics
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman
SEE MORE TEXTBOOKS