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This question asks you to think about an AR(1) model with a negative slope parameter (specifically, -1 < β1 < 0). Suppose that you have time-series data, denoted y1, y2, ... , yn, that follows the AR(1) model with negative slope. For concreteness, let's say that you run the AR(1) regression and obtain an intercept estimate of 15 and a slope estimate of -0.5.
a. What is the sign of the correlation between yt and yt-1?
b. How about the sign of the correlation between yt and yt-2? between yt and yt-3? Do you see a pattern?
c. The formula for the mean of the AR(1) process remains the same. In this case, the estimated mean would be 15/(1-(-0.5)) = 10. Suppose that your last observation yn is equal to 20. Use the OLS estimates in order to provide forecasts (just point estimates, not intervals) for the next five periods yn+1, yn+2, ..., yn+5. Comment on how the forecasts compare to the mean level of the AR(1) process.
Compute the discount factor 1/(1+r)^t for r=1, 5, or 10 perent interest rates and t=30 and 50 years. remember that 1 percent is .01. based on your computation, is teh choice of discount factor important for deciding whether to do somehtinga bout..
a. What is the contribution to profits from increasing advertising sales by $1 if Smith Corp. is currently spending between $500,000 and $600,000 on advertising b. What is the profit maximizing level of advertising
1. a. under a strict command-and-control framework suppose abatement standards are set equally across polluters. assume
Alistair deposited $10,000 on July 1, 2005, in a first fund that gives interest of 31?2 percent compounded semiannually and matures on June 1, 2012. He knows that, on December 18, 2012, he can deposit money in a second fund.
The widget market is competitive and includes no transaction costs. Five suppliers are willing to sell at the following prices: $30, $29, $20, $16, and $12. Five buyers are willing to buy one widget at the following prices: $10, $12, $20,$24, and ..
The demand curve and supply curve for a one-year discount bonds with a face value of $1,000 are represented by the following equations: Bd: Price=-0.6 Quantity +1140 Bs: Price= Quantity +700 a. What is the expected equilibrium price and quantity of ..
What is your view on this?
A firm has decided through regression analysis that its sales (S) are a function of the amount of advertising (measured in units) in two different media, television (x) and magazines (y): S(x, y) = 100 - x^2 + 30x - y^2 + 40y (a) Find the level o..
What are the profit-maximizing price that High-Tech should charge if they sell each product separately and what is the total price of the two goods?
1-Concisely explain the economic role of brokers, dealers, investment bankers and the role of the New York Stock Exchange specialist 2-If a bond dealer bought a $100,000 municipal bond at 92% of par and sold it at 96% of par, how much money did th..
The following table shows how the total cost of producing canisters of peanuts varies with output and capital in the long run in a perfectly competitive industry. Quantity of Peanut Canisters each hour 0 1 2 3 4 5 6 7 8 Total Cost (K=1) (in dollar..
20 economists were sampled and asked to predict if the national economy would improve during the next twelve months. Eleven of the economists predicted an increase, two economists predicted no change, and seven economists predicted.
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