What is the null hypothesis you are testing

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a. Estimate the two regressions given there, obtaining standard errors and the other usual output.

b. Test the hypothesis that the disturbances in the two regression models are normally distributed.

c. In the gold price regression, test the hypothesis that β₂ = 1, that is, there is a one-to-one relationship between gold prices and CPI (i.e., gold is a perfect hedge). What is the p value of the estimated test statistic?

d. Repeat step c for the NYSE Index regression. Is investment in the stock market a perfect hedge against inflation? What is the null hypothesis you are testing? What is its p value?

e. Between gold and stock, which investment would you choose? What is the basis of your decision?

Reference no: EM131243703

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