For each data table, before answering the questions, determine whether the simple regression model is a reasonable

Question:

For each data table, before answering the questions, determine whether the simple regression model is a reasonable description of the association between the two indicated variables. In particular, consider the conditions needed for the reliable use of the SRM. Then answer the listed questions. The data tables for these exercises are the same as those used for the like-numbered exercises in Chapter 19.

This data set tracks the monthly performance of stock in Apple from January 1990 through December 2015. The data include 312 monthly returns on Apple as well as returns on the entire stock market, Treasury Bills, and inflation. (The column labeled Market Return is the return on a value-weighted portfolio that purchases stock in proportion to the size of the company rather than one of each stock.) Formulate the SRM with Apple Return as the response and Market Return as the predictor.

(a) Is there a statistically significant linear association between returns on stock in Apple and returns on the market?

(b) Is the estimate of the intercept for this stock (b₀) significantly different from zero?

(d) This regression uses returns. Had the analysis been done in percentages (the percentage changes are 100 times the returns), would any of the previous answers change? If so, how?

Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

Fantastic news! We've Found the answer you've been seeking!