13. Suppose that the quantity demanded of an asset (in $) depends ONLY on three variables:...

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13. Suppose that the quantity demanded of an asset (in $) depends ONLY on three variables: price, risk, and the existing quantity supplied. Given the lack of information, we estimate the following linear model using data on N number of assets observed in one period: 2 Demandi = = o + BPricei + ui, where i represents the observation for asset i. Answer the following questions: (a) What time of data is being used for this regression, time series or cross sectional? Explain. (b) Excluding headers, how many rows of data would you have in your Excel file? Explain. (c) What information or variables does the error term u contain in this case? Explain. (d) Can we assume independence of the conditional mean in this case, that is, that E(u|x) = 0? Why yes or why not, and what are the implications of the model's assumed causality in either case? 13. Suppose that the quantity demanded of an asset (in $) depends ONLY on three variables: price, risk, and the existing quantity supplied. Given the lack of information, we estimate the following linear model using data on N number of assets observed in one period: 2 Demandi = = o + BPricei + ui, where i represents the observation for asset i. Answer the following questions: (a) What time of data is being used for this regression, time series or cross sectional? Explain. (b) Excluding headers, how many rows of data would you have in your Excel file? Explain. (c) What information or variables does the error term u contain in this case? Explain. (d) Can we assume independence of the conditional mean in this case, that is, that E(u|x) = 0? Why yes or why not, and what are the implications of the model's assumed causality in either case?