# How do individual companies respond to economic forces throughout the globe? One way to explore this is to see how

## Question:

a. Run a multiple regression to explain percentage changes in Microsoft stock from those of the three indexes. Which indexes, if any, show a significant t test? Report the p-value of each of these t tests. Is this consistent with where Microsoft is headquartered?

b. Run a multiple regression to explain percentage changes in China Telecom stock from those of the three indexes. Which indexes, if any, show a significant t test? Is this consistent with where China Telecom is headquartered?

c. Run an ordinary regression to explain percentage changes in Microsoft stock from the Hang Seng Index only. Is the regression significant? Report the overall p-value of the regression.

d. Reconcile the results of parts a and c, focusing in particular on whether the Hang Seng Index is significant in each regression. You may use the interpretation that when an explanatory variable is significant in a multiple regression, it says that this variable brings additional information about the Y variable over and above that brought by the other explanatory X variables.

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