Suppose you are examining how exchange rate of Canadian dollars with US dollars (EX) is affected...

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Suppose you are examining how exchange rate of Canadian dollars with US dollars (EX) is affected by oil price (OP) and Canadian domestic interest rates (R). You are particularly interested to test if there was any structural break in your model of exchange rate in 2001, the year of September 2011 twin tower attacks in the United States. You obtain annual data on the variables over the period 1980-2015 and estimate the following models for the entire sample and for the subsamples of 1980-2001 and 2002-2015 EXt=Po Bo + B₁0Pt + B₂ Rt + Ut Your calculated F statistic for the structural break test is given by F= 32. In view of the above information, answer the following questions: 1. (i) If the unrestricted SSR is 270 and SSR of the estimated model of 1980-2001 is 190 then what is the SSR of the estimated model for the 2002-2015 period? 2. (ii) What would you infer about the presence of structural break in the model of Canadian dollar exchange rate at the 10% level of significance? Suppose you are examining how exchange rate of Canadian dollars with US dollars (EX) is affected by oil price (OP) and Canadian domestic interest rates (R). You are particularly interested to test if there was any structural break in your model of exchange rate in 2001, the year of September 2011 twin tower attacks in the United States. You obtain annual data on the variables over the period 1980-2015 and estimate the following models for the entire sample and for the subsamples of 1980-2001 and 2002-2015 EXt=Po Bo + B₁0Pt + B₂ Rt + Ut Your calculated F statistic for the structural break test is given by F= 32. In view of the above information, answer the following questions: 1. (i) If the unrestricted SSR is 270 and SSR of the estimated model of 1980-2001 is 190 then what is the SSR of the estimated model for the 2002-2015 period? 2. (ii) What would you infer about the presence of structural break in the model of Canadian dollar exchange rate at the 10% level of significance?

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