The results of the regressions using 200 observation on a variable Y against X are as follows:Coefficient Standard errorintercept 3.62.1slope 8.11.3R square = 49%The regression equation can be expressed as:
Answer(s): A
Note that Y is regressed against X, implying that Y is the dependent (left-hand side) variable and X is the independent (right-hand side) variable. The intercept in a regression equals the constant term and the slope coefficient is the multiplier on the independent variable.
Suppose we set the criterion for the rejection of the null that is extremely lax, assuring us that the null will not be rejected. Then, which of the following is/are true?
Answer(s): E
A Type I error refers to the event that we will reject the null when, in fact, it is true. If the criterion is so loose that you never reject the null, then the probability of type I error is zero. A Type II error refers to the event that we will fail to reject the null when, in fact, it is false. If you never reject the null, then the probability of type II error is clearly non-zero. Finally, the significance level is the same as the probability of making a Type I error.
A stock has the following returns over 3 years: -5%, +15%, -4%. The annual geometric rate of return over the three years is ________.
Answer(s): B
The annual geometric rate of return equals [(1-5%)(1+15%)(1-4%)]^(1/3) - 1 = (0.95 * 1.15 * .96)^0.33 - 1 = 0.016 = 1.60%
What is the annual Internal Rate of Return of this series of annual cash flows: Year 0: <$25,000>, Year 1:$2,000, Year 2: $0, Year 3: $15,000, Year 4 to indicate a negative number).
On the BAII Plus, press CF 2nd CLRWork 25000 +/- ENTER DownArrow 2000 ENTER DownArrow DownArrow 0 ENTER DownArrow DownArrow 15000 ENTER DownArrow DownArrow 0 ENTERDownArrow DownArrow 18000 ENTER DownArrow DownArrow 2nd Quit. Then press Irr CPT. On the HP12C, press these keys: 25000 CHS BlueShift CFo 2000 BlueShift CFj 0 BlueShift CFj 15000BlueShift CFj 0 BlueShift CFj 18000 BlueShift CFj. Then press YellowShift Irr. The "DownArrow" represents the downward-pointing arrow on the top row of the BAII Plus keyboard. Make sure the BAII Plus has the P/Y value set to 1.
What is your monthly payment, beginning next month, on a $15,000 loan, if you pay it off over 48 months and the interest rate is 2.9% per year, compounded monthly?
Answer(s): C
On the BAII Plus, press 48 N, 2.9 divide 12 = I/Y, 15000 PV, 0 FV, CPT PMT. On the HP12c, press 48 n, 2.9 ENTER 12 divide i, 15000 PV, 0 FV, PMT. Note that the answer will be displayed as a negative number. Make sure the BAII Plus has the value of P/Y set to 1.
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