a) Explain the economic rationale underlying the regression equation. [25 marks] (b) Interpret the estimated coefficients of the OLS estimation. Using the appropriate statistics presented above, comment on how well the estimated model fits the data. [25 marks] (c) Discuss the adequacy of the model with respect to: (i) Serial correlation/autocorrelation. (ii) Heteroscedasticity. (iii) Normality of the disturbances. (iv) Functional form. [25 marks] (d) Predict the value of the weekly log return on AT&T stock if the market weekly log return is 0.02 (2 per cent). Is this forecast likely to be accurate? Explain. [25 marks]

Sorry, may I know what information needed? all information already given, you need table?

Table 1.1: OLS estimation Dependent variable: d(log(ATT)) Constant -0.003642 std error = 0.001925 t = -1.892294 p = 0.060317 d(log(SP500)) 0.870066 std error = 0.062201 t = 13.987940 p = 0.000000 Observations 157 R2 0.557980 Adjusted R2 0.555128 Residual Std. Error 0.024054 (df = 155) F Statistic 195.662600 (df = 1; 155) (p = 0.000000)

Table 1.2: Durbin-Watson test Durbin-Watson test DW = 2.0974, p-value = 0.7332 alternative hypothesis: true autocorrelation is greater than 0

Table 1.3: Breusch-Godfrey test for serial correlation Breusch-Godfrey test for serial correlation of order up to 1 LM test = 0.45697, df = 1, p-value = 0.499

Table 1.4: Breusch-Pagan test studentized Breusch-Pagan test BP = 0.85475, df = 1, p-value = 0.3552 Table 1.5: Jarque-Bera test Title: Jarque - Bera test Test Results: STATISTIC: X-squared: 4.7793 P VALUE: Asymptotic p Value: 0.09166 Table 1.6: RESET test RESET test RESET = 2.4674, df1 = 1, df2 = 154, p-value = 0.1183

AT&T Inc. is a multinational US telecommunications, media and entertainment company, listed on the New York stock exchange. The R output In Tables 1.1 to 1.6 was obtained using weekdy data for the period 5 February 2018 to 1 February 2021. In the estimation output log' is the natural logarithm, and 'd' is the first-difference operator. ATT is the AT&T stock price, log(ATT)) is the weekly log return on AT&T stock, and d(log(SP500), is the weekly log return on the Standard and Poor's 500 index. Table 1.1: OLD estimation Dependent vantable dlog ATTI) Constant -0.003642 std error -0.001925 t--1.892294 D - 0.060317 log(PS001) 0.870066 std error = 0.062201 t - 13.987940 p=0.000000 Observations 157 0.557980 0.555128 Adjusted Residual Std. Error 0.024054 (df - 155) F Statistik 195.6626001 - 1155 - 0.000000) Table 1.2: Durbin-Watson test Durbi-Watson test DW - 2.0974, p-value = 0.7332 alternative hypothesis: true autocorrelation is greater than Table 1.3: Breusch-Godfrey test for serial correlation Breusch-Godfrey test for serial correlation of order up to 1 LM test -0.45697, df - 1. p-value = 0.499 UL 21/0858 Page 2 of 18 Table 1.4: Breusch-Pagan test studentized Breusch-Pagantes: BP - 0.85475, df - 1. p-value - 0.3552 Table 1.5: _arque-Bera test THe: Jarque - Bera test Test Results: STATISTIC: X-squared: 4.7793 P VALUE: Asymptotic p Value: 0.09165 Table 1.6: RESET tes! REDET test RESET - 2.4674, 041 - 1, 2 - 154, p-value = 0.1183 AT&T Inc. is a multinational US telecommunications, media and entertainment company, listed on the New York stock exchange. The R output In Tables 1.1 to 1.6 was obtained using weekdy data for the period 5 February 2018 to 1 February 2021. In the estimation output log' is the natural logarithm, and 'd' is the first-difference operator. ATT is the AT&T stock price, log(ATT)) is the weekly log return on AT&T stock, and d(log(SP500), is the weekly log return on the Standard and Poor's 500 index. Table 1.1: OLD estimation Dependent vantable dlog ATTI) Constant -0.003642 std error -0.001925 t--1.892294 D - 0.060317 log(PS001) 0.870066 std error = 0.062201 t - 13.987940 p=0.000000 Observations 157 0.557980 0.555128 Adjusted Residual Std. Error 0.024054 (df - 155) F Statistik 195.6626001 - 1155 - 0.000000) Table 1.2: Durbin-Watson test Durbi-Watson test DW - 2.0974, p-value = 0.7332 alternative hypothesis: true autocorrelation is greater than Table 1.3: Breusch-Godfrey test for serial correlation Breusch-Godfrey test for serial correlation of order up to 1 LM test -0.45697, df - 1. p-value = 0.499 UL 21/0858 Page 2 of 18 Table 1.4: Breusch-Pagan test studentized Breusch-Pagantes: BP - 0.85475, df - 1. p-value - 0.3552 Table 1.5: _arque-Bera test THe: Jarque - Bera test Test Results: STATISTIC: X-squared: 4.7793 P VALUE: Asymptotic p Value: 0.09165 Table 1.6: RESET tes! REDET test RESET - 2.4674, 041 - 1, 2 - 154, p-value = 0.1183