{"id":426442,"date":"2018-09-20T03:11:17","date_gmt":"2018-09-20T03:11:17","guid":{"rendered":"https:\/\/acemystudy.com\/?p=3250"},"modified":"2018-10-24T08:55:52","modified_gmt":"2018-10-24T08:55:52","slug":"economics-applied-econometrics-estimation-and-hypothesis-testing","status":"publish","type":"post","link":"https:\/\/www.benedictsol.com\/blogs\/economics-applied-econometrics-estimation-and-hypothesis-testing\/","title":{"rendered":"Economics, Applied Econometrics: Estimation and Hypothesis Testing"},"content":{"rendered":"<h4>EC450 \u2013 Applied Econometrics\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Fall 2018<\/h4>\n<h4>Homework Assignment 2.\u00a0 Estimation and Hypothesis Testing<\/h4>\n<p><strong>General instructions for all assignments \u2013 I will deduct points if you do not follow all directions:<\/strong><\/p>\n<ul>\n<li>This is <u>NOT<\/u> a group assignment; your submission should reflect <u>your<\/u><\/li>\n<li>Output from Stata must be provided to earn <u>any credit<\/u>, and the values that you reference to answer any question must be highlighted in the output. Please do not include the raw data that I provide with each assignment.<\/li>\n<li>If you are handing in multiple pages, please <u>staple<\/u> the pages together; I am not responsible for missing pages.<\/li>\n<li>For each problem that is a hypothesis test, make sure you specify the competing hypotheses, show how you make your conclusion to the hypothesis test, and state the answer to the question!<\/li>\n<\/ul>\n<p>The data used in this homework assignment is the same that was used in the first assignment.\u00a0 I still replicate it on Blackboard and call it \u2018Data for HW2\u2019.\u00a0 As a refresher, the data shows annual returns (in %) for 40 small cap corporations and 40 large cap corporations.<\/p>\n<ol>\n<li><strong> (35 points)<\/strong><\/li>\n<li>For a 95% confidence interval, what are the lower and upper limits for SmallCaps\u2019s average return?<\/li>\n<li>State the competing hypotheses to determine whether SmallCaps\u2019s average return differs from 20%.<\/li>\n<li>At the 5% significance level, what is the conclusion to the hypothesis test? Does SmallCaps\u2019s average return differ from 20%?<\/li>\n<li>State the competing hypotheses to determine whether the population standard deviation for SmallCaps is greater than 30%.<\/li>\n<li>At the 5% significance level, can you conclude that the population standard deviation is greater than 30%?<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<ol start=\"2\">\n<li><strong> (28 points) <\/strong><\/li>\n<li>State the competing hypotheses to determine whether LargeCaps\u2019s average return is less than 15%.<\/li>\n<li>At the 5% significance level, what is the conclusion to the hypothesis test? Is LargeCaps\u2019s average return less than 15%?<\/li>\n<li>State the competing hypotheses to determine whether the population standard deviation for LargeCaps differs from 25%.<\/li>\n<li>At the 5% significance level, can you conclude that the population standard deviation differs from 25%?<\/li>\n<\/ol>\n<p><strong>\u00a0<\/strong><\/p>\n<ol start=\"3\">\n<li><strong> (16 points)<\/strong><\/li>\n<li>State the competing hypotheses to determine whether SmallCaps\u2019s average return is greater than LargeCaps\u2019s average return. [These are independent samples; so from the menu select Statistics &gt; Summaries\u2026&gt; Classical tests\u2026&gt; t tests, then in the dialog box make sure to select two-sample using variables (then select the variables), and finally assume unequal variances.]<\/li>\n<li>At the 5% significance level, can you conclude that SmallCaps\u2019s average return is greater than LargeCaps\u2019s average return?<\/li>\n<\/ol>\n<p><strong>\u00a0<\/strong><\/p>\n<ol start=\"4\">\n<li><strong> (21 points)<\/strong><\/li>\n<li>State the competing hypotheses to determine whether the population standard deviation for SmallCaps is greater than the population standard deviation for LargeCaps.<\/li>\n<li>At the 5% significance level, can you conclude that the population standard deviation for SmallCaps is greater than the population standard deviation for LargeCaps?<\/li>\n<li>Given your answers to questions 3b and 4b, does one type of investing seem superior to the other? Explain.<\/li>\n<\/ol>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>EC450 \u2013 Applied Econometrics\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Fall 2018 Homework Assignment 2.\u00a0 Estimation and Hypothesis Testing General instructions for all assignments \u2013 I will deduct points if you do not follow all directions: This is NOT a group assignment; your submission should reflect <a href=\"https:\/\/www.benedictsol.com\/blogs\/economics-applied-econometrics-estimation-and-hypothesis-testing\/\" class=\"read-more\">Read More &#8230;<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-426442","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/426442","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=426442"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/426442\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=426442"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=426442"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=426442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}