Question
Review Treasury bills and inflation on page 585-586, and replicate exercise 12.8-12.10 and 12.31 using data 1980-2020. Prepare a excel file with three columns: year,
Review Treasury bills and inflation on page 585-586, and replicate exercise 12.8-12.10 and 12.31 using data 1980-2020. Prepare a excel file with three columns: year, t-bill percent, and inflation percent. Input 1980-2017 data from Table 12.1 (page 585, also attached end of the assignment) and update the table with following informations: Table 12.1 Return on Treasury bills and rate of inflation (continued) Year T-bill percent Inflation percent 1980 11.32 12.50 2018 1.75 1.9 2019 2.57 2.3 2020 1.59 1.4 Q1 (1 points) Prepare an excel file having 6-months t-bill and inflation rate covering 1980-2020. Look at the data using summary statistics table (report mean. Median, std, min, max). Review the 12.8 question and replicate same thing using the data from 1980-2020. Insert your data as appendix tables with your assignment. Q2 (1 points) Is there a relationship? Review the 12.9 question and replicate the same results and interpret your finds using the data from 1980-2020.Show the relationship using graph then comments. [Tips: summary table, scatter plot, and regression equation] Q3 (1 points) Estimating the slope. Review the 12.10 question and replicate the same results and interpret your finds using the data from 1980-2020. Copy your regression output then comments. Q4. (2 points) Based on the regression output from Q3, answer the followings: a. The intercept ! in the regression model is meaningful in this example. Explain what ! represents. Why should we expect !to be greater than 0? Is there sufficient evidence that ! is greater than 0? b. Find the sample correlation r. From r, calculate the t-statistic for testing correlation. What are the degrees of freedom? Verify that your t-statistic for correlation calculated in part (b) has same value as the t for slope in the regression output on Q3. [Tips: Review Example 12.6 on page 588].
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