A statistics question
Not what you're looking for?
Dear:
I need help with the following sample question. Many thanks!
Could you offer me related data and detailed explanations to the sub-questions so that I can attack similar problems? Thanks!
The question:
We will run a regression to test whether the Random Walk Model describes daily adjusted closing prices for StockA. Use the adjusted daily closing prices for this regression, rather than the daily percentage changes. Create a new column of data that represents the one-day lagged (i.e. the "t-1") values of the stock.{suggestion: set up the lagged column using Excel; if you're working with Stata, copy and paste new variable into the Data Editor.}
Create a scatterplot with StockA(t) on the Y-axis and Stock A(t-1) on the horizontal, and comment on the pattern formed by the points.
Estimate the best fit line for this model, and use the reported Confidence Intervals for the slope and intercept to decide if the Random Walk model can credibly account for the pattern of daily prices (i.e. compare α = 0 and β = 1 to your intervals). Comment on your conclusions and possible underlying reasons for your result. If the stock is following a Random Walk, what implications might this have for your client?
Please see the attchment for the adjusted prices of stock A (Cisco Systems) (July1, 2002--September 1, 2007). These prices are downloaded from Yahoo! Finance.
Many thanks!
Purchase this Solution
Solution Summary
Could you offer me related data and detailed explanations to the sub-questions so that I can attack similar problems? Thanks!
Solution Preview
The solutions to your requested problems given in two attached files. One is the document which describes the procedure to create the lagged ...
Purchase this Solution
Free BrainMass Quizzes
Measures of Central Tendency
This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.
Know Your Statistical Concepts
Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.
Measures of Central Tendency
Tests knowledge of the three main measures of central tendency, including some simple calculation questions.
Terms and Definitions for Statistics
This quiz covers basic terms and definitions of statistics.