# Simple Regression Model Practice Problems Essay example

616 Words May 10th, 2011 3 Pages
Chapter 4 Simple regression model Practice problems

Use Chapter 4 Powerpoint question 4.1 to answer the following questions: 1. Report the Eveiw output for regression model .

2. Are the sign for consistent with your expectation, explain?

3. Hypothesize the sign of the coefficient and test your hypothesis at 5% significance level using t-table.

4. What percentage of variation in 30 year fixed mortgage rate is explained by this model? Why?

Use Chapter 4 Powerpoint question 4.2 to answer the following questions:

5. Report the Eveiw output for regression model
Based on the estimation period of 1986.01 – 1999.07. Please write down your fitted regression
Are the sign for consistent with your expectation, explain?
Yes it is to my expectation because a lower interest rate makes the cost of borrowing cheaper, which will stimulate spending and promote production, indicating a negative B1. 11. Hypothesize the sign of the coefficient and test your hypothesis at 5% significance level using t-table. 1. H0: β1 >= 0
H1: β1 < 0 2. t_calc = -4.200821 3. t_critial = 1.645 4. since t_calc > t_critial, we reject H0. 5. Becasue …., I reject H0 and conclude β1 is negative and the sign of USTBR is negative.

12. What percentage of variation in USPI is explained by this model? Why?
9.8781% because R squared is 9.8781% 13. Based on your Eview model, report your forecast of USPI for the period of 1999.08-2000.07. Report RMSE. Date | USPI | USPI_excel | USTBR | USPI_Forecast | (uspi - uspi forecast)^2 | 1999M08 | 120.38 | 95.59438604 | 4.76 | 95.59435 | 614.3266594 | 1999M09 | 120.588 | 95.67411617 | 4.73 | 95.67408 | 620.7016075 | 1999M10 | 121.595 | 95.27546552 | 4.88 | 95.27543 | 692.7178952 | 1999M11 | 121.834 | 94.77050803 | 5.07 | 94.77047 | 732.4325976 | 1999M12 | 122.446 | 94.34528067 | 5.23 | 94.34524 | 789.6504269 | 2000M01 | 123.32 | 94.05293686 | 5.34 | 94.0529 | 856.5609848 | 2000M02 | 123.757 | 93.44167253 | 5.57 |

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