Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

16. Suppose that you are interested in examining the relationship between executive compensation and three independent variables that you believe have an effect: Proficiency in

16. Suppose that you are interested in examining the relationship between executive compensation and three independent variables that you believe have an effect: Proficiency in a second language, education level, and work experience abroad. You want to be sure, however, that conditional heteroscedasticity is not present in your data. Therefore, you regress the squared residuals of the regression model onto the three independent variables, and you find that the R2 for the regression 0.181. Your sample size of executives is 36. Answer each of the following questions and be sure to label your answers so that I can read them and know which question you are answering. Circle your answer if the question is asking for a specific value. Show your work for each question.

a. What is the name of the test that is used to determine if conditional heteroscedasticity is present?

b. Using the information provided, calculate the F-statistic that you would use to determine if there is conditional heteroskedasticity present. (show your work)

c. Using the information provided, calculate the Chi2 test statistic (LM method) that you would use to determine if there is conditional heteroskedasticity present. (show your work)

d. What critical value would you use if you are testing at a 5% significance level using the F-test approach?

e. What critical value would you use if you are testing at a 5% significance level using the Chi2 test approach?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Discrete Mathematics, Revised

Authors: Seymour Lipschutz, Marc Lipson

3rd Edition

0071615873, 9780071615877

More Books

Students also viewed these Mathematics questions

Question

4. What means will you use to achieve these values?

Answered: 1 week ago