Econometrics UE Past Papers Questions.

You have been requested to estimate the relationship between the exchange rate the interest rate . Econometrically, a model for the exchange rate as a function of the interest  rate is given as:

Note that the subscript stands for time in which the data were observed

1. What is the interpretation of the regression coefficients
2. What type of data is used is in this model?
3. What problem is most likely to be encountered upon estimation?
4. How will you test the presence of this problem
5. In an event you detect the problem identified in part (d) what will you do to fix it?

Answer / Solution

UNSOLVED

Read the data presented in the table below

Data on tree height and trunk diameter.

Note that t has  n-2 degrees of freedom

1. Using data presented above, calculate the sample correlation coefficient between tree height and trunk diameter
2. Interpret the correlation coefficient
3. State the null and alternative hypothesis to test whether there is a significant linear relationship between y and x.
4. What conclusion will you make? Note that t(6)=2.4469

Answer / Solution

UNSOLVED

Probit and logit are typical examples of non-linear probability models.

Answer / Solution

UNSOLVED

When a logit model is estimated an analyst assumes that errors are normally distributed with a known mean and known variance.

Answer / Solution

UNSOLVED

A distribution is skewed  to the right when: mean <median<mode.

Answer / Solution

UNSOLVED