a. You are trying to understand the performance of Indian stock market in relation with the

performance of Indian Economy. If you are to prepare a simple mutli-variate regression

model to study the above relationship, how would you prepare the model? Discuss the

list of variables, its relevance and source of data for the above analysis.

b. In the above analysis, if you were to analyse whether there is a presence of a month of

the year effect in Indian Stock Market, how would you modify the analysis using a dummy variable? Discuss the concept of dummy variable trap and how you could avoid

that in the current analysis.