This homework uses an Excel data file called HW2DataF22. It is posted on Canvas. The Excel data file contains five variables. These variables are based on USA economic data. The data are monthly and cover the period from November 2012 to September 2022. All are in percent. Descriptions of the variables are FX: percentage change in value of the US dollar relative to other currencies. Positive figure indicates US dollar appreciation, and negative figure indicates depreciation. UEMP: unemployment rate in the US DS: default spread. The difference in interest rate between Baa rated bonds and the 10 year Treasury bond YSLP: slope of the yield curve. The difference in interest rate between 10 year and 2 year Treasuries. SNP: rate of return on the S&P 500 stock index. 1. Upload the data into R. 2. Perform summary statistics, correlations and variance-covariances of the variables. 3. Run regression of the SNP (stock return) on the other four variables. 4. Which of the variables have significant explanatory power and which ones do not? Do the signs of the coefficients make sense? 5. Test a hypothesis that UEMP and YSLP do not have impact on SNP. 6. Organize your work properly and upload your solutions.

Month FX. UEMP DS YSLP SNP 2012-11 0.7917 7.7000 2.8600 1.3800 -1.2497 2012-12 -0.6501 7.9000 2.9100 1.4600 1.9916 2013-01 -0.0604 8.0000 2.8200 1.6400 4.0857 2013-02 0.7987 7.7000 2.8700 1.7100 2.1559 2013-03 0.9419 7.5000 2.8900 1.7000 2.5469 2013-04 0.3954 7.6000 2.8300 1.5300 1.2815 2013-05 0.5228 7.5000 2.8000 1.6800 4.4019 2013-06 0.8155 7.5000 2.8900 1.9700 -1.2849 2013-07 0.6312 7.3000 2.7400 2.2400 3.0828 2013-08 -0.1678 7.2000 2.6800 2.3800 0.0850 2013-09 -0.2607 7.2000 2.6600 2.4100 1.0227 2013-10 -1.0392 7.2000 2.6900 2.2800 1.9472 2013-11 0.9453 6.9000 2.6600 2.4200 3.6926 2013-12 0.1717 6.7000 2.4800 2.5600 1.3588 2014-01 0.9951 6.6000 2.3300 2.4700 0.8066 2014-02 0.1914 6.7000 2.3900 2.3800 -0.2920 2014-03 -0.2164 6.7000 2.3400 2.3200 2.5585 2014-04 -0.4714 6.2000 2.1900 2.2900 0.0397 2014-05 -0.3464 6.3000 2.2000 2.1700 1.3680 2014-06 0.1680 6.1000 2.2000 2.1500 3.0332 2014-07 -0.2382 6.2000 2.1900 2.0300 1.3360 2014-08 1.0437 6.1000 2.2700 1.9500 -0.5863 2014-09 1.6283 5.9000 2.2700 1.9600 1.6158 2014-10 1.3719 5.7000 2.3900 1.8500 -2.8071 2014-11 1.7191 5.8000 2.4600 1.8000 5.5386 2014-12 2.3502 5.6000 2.5300 1.5700 0.4741 2015-01 2.2837 5.7000 2.5700 1.3300 -1.2699 2015-02 1.3569 5.5000 2.5300 1.3600 2.6633 2015-03 2.0883 5.4000 2.5000 1.4000 -0.1059 2015-04 -0.9430 5.4000 2.5400 1.4000 0.7150 2015-05 -0.8893 5.6000 2.6900 1.5900 0.8154 2015-06 0.7329 5.3000 2.7700 1.6700 -0.5994 2015-07 1.8315 5.2000 2.8800 1.6500 -0.2448 2015-08 1.7140 5.1000 3.0200 1.4700 -2.5919 2015-09 0.7952 5.0000 3.1700 1.4600 -4.6799 2015-10 -0.8549 5.0000 3.2700 1.4300 4.1355 2015-11 1.6270 5.1000 3.2000 1.3800 2.7560 2015-12 0.9796 5.0000 3.2200 1.2600 -1.2754 2016-01 2.1712 4.8000 3.3600 1.1900 -6.5957 2016-02 -0.8268 4.9000 3.5600 1.0500 -0.7390 2016-03 -2.0904 5.0000 3.2400 1.0100 6.1717 2016-04 -1.6770 5.1000 2.9800 1.0400 2.6500 2016-05 1.0214 4.8000 2.8700 0.9900 -0.4810 2016-06 0.3769 4.9000 2.8900 0.9100 0.8879 2016-07 0.8217 4.8000 2.7200 0.8300 3.1197 2016-08 -0.9238 4.9000 2.6800 0.8200 1.3300 2016-09 0.7886 5.0000 2.6800 0.8600 -0.9089 2016-10 1.0300 4.9000 2.6200 0.9200 -0.6799 2016-11 2.3206 4.7000 2.5700 1.1600 1.0249 2016-12 1.5481 4.7000 2.3400 1.2900 3.7711 2017-01 -0.1008 4.7000 2.2300 1.2200 1.2680 2017-02 -1.4144 4.6000 2.2200 1.2200 2.4084 2017-03 -0.4005 4.4000 2.2000 1.1700 1.5843 2017-04 -0.7656 4.4000 2.2700 1.0600 -0.3174 2017-05 -0.4429 4.4000 2.2500 1.0000 1.5274 2017-06 -1.3126 4.3000 2.1800 0.8500 1.6131 2017-07 -1.5075 4.3000 2.0700 0.9500 0.8265 2017-08 -1.0396 4.4000 2.1000 0.8700 0.0864 2017-09 -0.9565 4.3000 2.1000 0.8200 1.4908 2017-10 1.8702 4.2000 1.9600 0.8100 2.5736 2017-11 0.2476 4.2000 1.9200 0.6500 1.4317 2017-12 -0.2580 4.1000 1.8200 0.5600 2.7273 2018-01 -2.2715 4.0000 1.6800 0.5500 4.7090 2018-02 -0.6518 4.1000 1.6500 0.6800 -3.0342 2018-03 0.2764 4.0000 1.8000 0.5600 -0.0880 2018-04 -0.0044 4.0000 1.8000 0.4900 -1.8184 2018-05 2.8745 3.8000 1.8500 0.4700 1.8039 2018-06 1.6191 4.0000 1.9200 0.3800 1.9567 2018-07 0.1910 3.8000 1.9000 0.2800 1.4265 2018-08 0.6819 3.8000 1.8800 0.2500 2.2973 2018-09 0.2177 3.7000 1.8800 0.2300 1.5284 2018-10 0.6587 3.8000 1.9200 0.2900 -3.9992 2018-11 1.1653 3.8000 2.1000 0.2600 -2.2343 2018-12 0.0373 3.9000 2.3000 0.1500 -5.7256 2019-01 -1.5258 4.0000 2.4100 0.1700 1.5613 2019-02 -0.0267 3.8000 2.2700 0.1800 5.6560 2019-03 0.3252 3.8000 2.2700 0.1600 1.7830 2019-04 0.1038 3.6000 2.1700 0.1900 3.5598 2019-05 0.9192 3.6000 2.2300 0.1900 -1.6907 2019-06 -0.4559 3.6000 2.3900 0.2600 1.2422 2019-07 -0.3046 3.7000 2.2200 0.2200 3.6658 2019-08 1.7606 3.7000 2.2400 0.0600 -3.2914 2019-09 0.1899 3.5000 2.2100 0.0500 2.9218 2019-10 -0.4921 3.6000 2.2100 0.1600 -0.1503 2019-11 -0.1604 3.6000 2.1300 0.2000 4.2728 2019-12 -0.5567 3.6000 2.0200 0.2500 2.3139 2020-01 -0.5471 3.5000 2.0100 0.2400 3.1936 2020-02 1.2405 3.5000 2.1100 0.1700 -0.0271 2020-03 3.7075 4.4000 3.4200 0.4200 -19.0681 2020-04 1.8720 14.7000 3.4700 0.4400 4.1314 2020-05 -0.5403 13.2000 3.2800 0.5000 5.7075 2020-06 -2.3965 11.0000 2.9100 0.5500 6.3380 2020-07 -0.8217 10.2000 2.6900 0.4700 3.3162 2020-08 -1.4662 8.4000 2.6200 0.5100 5.7392 2020-09 -0.5201 7.9000 2.6800 0.5500 -0.7723 2020-10 -0.4880 6.9000 2.6500 0.6400 1.5803 2020-11 -1.4580 6.7000 2.4300 0.7000 3.8111 2020-12 -1.9256 6.7000 2.2300 0.7900 4.1228 2021-01 -0.3729 6.4000 2.1600 0.9500 2.6639 2021-02 0.4733 6.2000 2.1600 1.1400 2.3640 2021-03 1.1914 6.0000 2.1300 1.4600 0.6972 2021-04 -0.6120 6.0000 1.9700 1.4700 5.8987 2021-05 -1.2602 5.8000 2.0000 1.4700 0.6441 2021-06 0.3383 5.9000 1.9200 1.3200 1.6949 2021-07 1.3234 5.4000 1.9200 1.1000 2.9544 2021-08 0.2939 5.2000 1.9600 1.0600 2.0738 2021-09 0.0438 4.7000 1.8600 1.1300 -0.1945 2021-10 0.5469 4.6000 1.7700 1.1900 0.3411 2021-11 0.8127 4.2000 1.7200 1.0500 4.6333 2021-12 0.6952 3.9000 1.8400 0.7800 0.1582 2022-01 -0.6440 4.0000 1.8200 0.7800 -2.1596 2022-02 -0.0261 3.8000 2.0400 0.4900 -3.0136 2022-03 1.1849 3.6000 2.1600 0.2200 -1.0080 2022-04 0.7732 3.6000 1.9100 0.2100 0.0007 2022-05 2.1560 3.6000 2.2200 0.2800 -7.9916 2022-06 0.2679 3.6000 2.1300 0.1400 -3.5000 2022-07 2.2127 3.5000 2.3100 -0.1400 0.3279 2022-08 -0.3212 3.7000 2.2500 -0.3500 6.3101 2022-09 2.7131 3.5000 2.1700 -0.3400 -7.4074