A major sector in the Canadian economy is minerals. Growth in that sector is associated with an

Question:

A major sector in the Canadian economy is minerals. Growth in that sector is associated with an increase in the value of the Canadian dollar. The data set contains monthly data for the Canadian exchange rate and stock indices for various sectors of the economy on the Toronto Stock Exchange. Investigate how the exchange rate depends on the indices for metals and mining, gold, and energy.

a) Calculate a regression using the exchange rate as the dependent variable and the three indices for metals and mining (M&M), gold, and energy as the independent variables for 2008–2009. Without checking the conditions and assumptions, simply write the regression equation and indicate any regression coefficients that are not significant. How much of the variation in exchange rate does your model explain and what is the standard error?

b) The peak exchange rate during this period (1.0463) occurred in July 2011. What is the predicted value for July 2011 and its associated error?

c) Increase the data value for July 2011 by one and recompute the regression. What is the predicted value for July 2011? What is the leverage of July 2011?

d) Calculate the Cook’s Distance for July 2011.

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Business Statistics

ISBN: 9780133899122

3rd Canadian Edition

Authors: Norean D. Sharpe, Richard D. De Veaux, Paul F. Velleman, David Wright

Question Posted: