Question 1 You are investigating if firms selling differentiated products (i.e., different brand names) end up with higher returns on their equity capital. You obtained the following regression results based on a sample of 48 firms: Y,- =1.399+1.490DI- +0.246X2i 9.507X3i 0.016X4i se=(O.456) (0.501) (0.056) (4.244) (0.017) R2 20.26 where Y: the rate of return on equity D = 1 for firms with product differentiation X2 = the market share X3 = the measure of the firm size X4 = the industry growth rate a) (5 marks) Interpret the results describing the coefficients and statistical significance. b) (2 marks) From your analysis, do firms that product differentiate earn a higher rate of return? Explain. Question 2 What is an autoregressive model? Provide an example of an autoregressive model. When is it appropriate to use the autoregressive specification? (4 marks)