b) Interpret the results in Figures 4.2 and 4.3. Do these two tests provide conflicting results? If so, which would you consider to be more reliable and why? (15 Marks) c) Using the information in Figure 4.4, describe the long-run relationship between dividends and price, and how the variables respond to deviations in this long-run relationship. (12 Marks) Figure 4.1 Dependent Variable: PRICE Method: Least Squares Sample: 195701 201704 Included observations: 244 Variable Coefficient Std. Error t-Statistic Prob C 1.253734 0.033898 37.20468 0.0000 DIV 0.860883 0.007935 109.6293 D.00 00 R-squared 0.980262 Mean dependent var 4.733018 Adjusted R-squared 0.980180 S.D. dependent var 1.257030 S.E. of regression 0.178987 Akaike info criterion -0.617540 Sum squared resid 7.578821 Schwarz criterion -0.588875 Log likelihood 77.33989 Hannan-Quinn criter. -0.605905 F-statistic 12018.58 Durbin-Watson stat 0.153234 Prob(F-statistic) 0.000000 Figure 4.2 Dependent Variable: D(U) Method: Least Squares Sample (adjusted): 194702 200704 Included observations: 243 after adjustments Variable Coefficient Std. Error t-Statistic Prob. LX(-1) -0.0790 06 0.024890 -3.190862 0.0016 R-squared 0.040572 Mean dependent var -0.000326 Adjusted R-squared 0.040572 S.D. dependent var 0.080273 S.E. of regression 0.067853 Akaike info criterion 2.538825 Sum squared resid 1.114192 Schwarz criterion 2.524450 Log likelihood 309.4672 Hannan-Quinn criter. -2.533035 Durbin-Watson stat 1.727918 *where: "U" represents the residuals of the regression in Figure 3.1