Answered step by step
Verified Expert Solution
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 years
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 y; = Bo+B4X1i + B2X21 + Ej, where y; is the change over the quarter in the bond interest rates, X1 is the change over the quarter in bond purchases by financial institutions, and Xzi is the change over the quarter in bond sales by financial institutions. The estimated regression coefficients are by = 0.068 and b2 = -0.026. 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. O A. Each percent increase in the bond interest rates leads to a change in the estimated amount of bonds purchased by financial institutions by and a decrease in bond sales by financial institutions by O B. Each additional bond purchased by financial institutions leads to a change in the estimated bond interest rates by percent. Each additional bond sale by financial institutions leads to a change in the estimated bond interest rates by percent. O C. There is no meaningful interpretation of the regression coefficients for this application
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started