Please solve the following questions in separate documents (in simpler words I need 2 separate documents)
1.Assume you are building an econometric model to determine what factors are associated with student success in a business class at NU.
a.As many upper division classes at NU include both grad and undergrad students, let’s say you want to estimate the impact of that status on class performance. Specify a dummy variable that would allow you to distinguish between undergraduate and graduate students in the class. Why would a dummy variable make sense for this characteristic you want to include in the model?
b.What is the hypothesized sign on the grad/undergrad dummy variable? How does your answer depend on the way you define your dummy variable?
c.Suppose that you collected the data and ran the regression and found an estimated coefficient for D that had the expected sign and an absolute value of 0.5. How would you interpret this estimate?
2.Edward Saunders published an article that tested the possibility that the stock market is affected by the weather on Wall Street. Using daily stock data from 28 years, he estimated an equation with the following variables (standard errors in parentheses):
(0.01) (0.0006) (0.004) (0.0002)
N = 6,911
where: = Percent change in the Dow Jones Industrial Index on day t
= Daily index capital gain or loss for the previous day
= Dummy variable equal to 1 if the ith day is in January
= Dummy variable equal to 1 if the ith day is a Monday
= Variable equal to 1 if the cloud cover was no more than 20%, equal to -1 if the cloud cover was 100%, 0 otherwise
a.Saunders did not include an estimate of the constant term in his published regression results. Which of the Classical Assumptions supports the conclusion that you should not spend much time analyzing estimates of the constant term? Explain.
b.Which of the Classical Assumptions would be violated if you decided to add a dummy variable to the equation that was equal to 1 if the ith day was any non-Monday weekday (remembering that the stock market is closed on weekends)?
please solve the following to questions with its letters in a separate document and then the file that I will be uploading in another document. I will be uploading a file with an excel sheet that contains data.
You can solve these using minitab or eviews or megastat. preferrably eviews since one of the files is only opened there(it is not allowing me to upload it here for some reason).