Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In a study of the influence of financial institutions on bond interest rates in a certain country, quarterly data over a period of 12

image text in transcribed

In a study of the influence of financial institutions on bond interest rates in a certain country, quarterly data over a period of 12 years were analyzed. The postulated model was yi Bo+B1x11 +221 +, where y, is the change over the quarter in the bond interest rates, x, is the change over the quarter in bond purchases by financial institutions, and X2; is the change the quarter in bond sales by financial institutions. The estimated regression coefficients are b =0.057 and b = -0.061. Interpret these estimates. What is the correct interpretation of the coefficient estimates? Select the correct choice below and, if necessary, fill in the answer boxes within your choice. OA. Each additional bond purchased by financial institutions leads to a change in the estimated bond interest rates by change in the estimated bond interest rates by percent. percent. Each additional bond sale by financial institutions leads to OB. Each percent increase in the bond interest rates leads to a change in the estimated amount of bonds purchased by financial institutions by institutions by OC. There is no meaningful interpretation of the regression coefficients for this application. and a decrease in bond sales by financial

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

Basic Finance An Introduction to Financial Institutions Investments and Management

Authors: Herbert B. Mayo

10th edition

1111820635, 978-1111820633

More Books

Students also viewed these Finance questions

Question

What are the issues for managers of content management?

Answered: 1 week ago