Re-open the ‘macro.wf1’ and apply the stepwise procedure including all of the explanatory variables as listed above, i.e. ersandp dprod dcredit dinflation dmoney dspread rterm with a strict 5% threshold criterion for inclusion in the model. Then examine the resulting model both financially and statistically by investigating the signs, sizes and significances of the parameter estimates and by conducting all of the diagnostic tests for model adequacy.

AppendixLO1