Analysts assessed the effects of bond ratings on bond yields. They reported a regression with r2 = 61.56%, which, they said, confirmed the economic intuition that predicted higher yields for bonds with lower ratings (by economic theory, an investor would require a higher expected yield for investing in a riskier bond). The conclusion was that, on average, each notch down in rating added an approximate 14.6 basis points to the bond’s yield. How accurate is this prediction?
Answer to relevant QuestionsFind r2 for the regression in problem 10–15. In problem Inflation (%) Total Return on Stocks (%) 1 ................ –3 2 ................ 36 12.6 .............. 12 –10.3 ............... –8 0.51 ...In a regression, the F statistic value is 6.3. Assume the sample size used was n = 104, and conduct an F test for the existence of a linear relationship between the two variables. What are the purpose and meaning of the error term in regression? A regression analysis was performed to assess the impact of the perception of risk (credit card information theft, identity theft, etc.) on the frequency of online shopping. The estimated slope of the regression line of ...Explain what is tested by the hypothesis test in equation. What conclusion should be reached if the null hypothesis is not rejected? What conclusion should be reached if the null hypothesis is rejected? H0: β1 = β2 = β3 = ...
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