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Question 3 25 marks] This question requires the use of GRETL. Download the Data on SAKAI for this Assignment named assignment1_data.gdt into GRETL. The data

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Question 3 25 marks] This question requires the use of GRETL. Download the Data on SAKAI for this Assignment named "assignment1_data.gdt" into GRETL. The data set contains daily total return indices (TRI) for the stocks of Google and Yahoo in SUS and also values for the NASDAQ Composite Index (NASDAQ) from 30/07/2013 to 30/07/2015. a a) [5] What is a total return index? Create a time series plot for the stock of Google. Create a second time series plot for the stock of Yahoo. Carefully explain the pattern you see. Calculate descriptive statistics for the two TRIs, i.e. report the means, standard deviations, skewness and kurtosis. b) (5) What is the NASDAQ Composite Index? Create a scatter plot of the Yahoo TRI (Y-Axis) against the NASDAQ Index (X-Axis). Label your graph. c) (5) What is the economic theory behind the relationship between the two variables in b)? Does the scatter plot support the theory? d) (5) Estimate the OLS regression of the Yahoo TRI on the NASDAQ Index (round to two decimals). Interpret the estimated regression coefficient. e) (5) What is, according to your model, the predicted Yahoo TRI when the NASDAQ is at 6,000 points? Do not use GRETL for this last question, but show your calculation on paper

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