Case1-2017.pdf-of 2 Case No. 1 Instructi...
Case1-2017.pdf-of 2 Case No. 1 Instructions
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Case1-2017.pdf-of 2 Case No. 1 Instructions
Case1-2017.pdf-of 2 Case No. 1 Instructions
Case1-2017.pdf-of 2 Case No. 1 Inst...
Case1-2017.pdf-of 2 Case No. 1 Instructions
Page 1
1 of 2
Case No. 1
Instructions (READ VERY CAREFULLY!)
1.
The Case has to be printed and
stapled
(no clips, folders or binders).
2.
For the cover page, please use the simple format presented in the box below.
3.
Make sure that the relevant output from Excel and SAS is included with the answer
to each question where needed.
4.
Member 1 will upload the Excel file on Blackboard (I might be checking it)
5.
Attach your full SAS code (only the code, no log, no output) at the end.
FINA6271
– Financial Modeling and Econometrics
Case I - Fall 2017
FINA6271
CASE No. 1
(Date presented)
Member 1 name (Last, First)
Signature
Member 2 name (Last, First)
Signature
Member 3 name (Last, First)
Signature
Member 4 name (Last, First)
Signature


Page 2
2 of 2
The Dataset
The dataset case1.xlsx contains data on US Defense Budget outlays and GNP for every year
between 1962 and 1981.
YEAR = Year
Y
= Defense Budget-Outlays for Year T, $/Billions
X
= GNP for Year T, $/Billions
Requirements
I.
Using Excel:
1.
Create a scatter plot (using Excel) that presents the dependent variable (Defense
Budget) on the Y-axis and independent variable (GNP) on the X-axis.
2.
Calculate and present the intercept, slope, RMSE and the R
2
of the regression where
Defense Budget Outlays is the dependent variable and the GNP is the independent
variable using:
a.
The formulas for regression.
b.
The Regression tool in the Excel Analysis Toolpack (except the RMSE).
3.
Calculate the residual at each value of X in the sample.
II.
Using SAS:
4.
Present the output from running both proc reg and proc glm to generate the regression
where Defense Budget Outlays is the dependent variable and the GNP is the
independent variable.
5.
Present the resulting regression equation.
6.
Interpret the coefficient associated with GNP.
7.
What proportion of the variation in the dependent variable is predictable from the
independent one in the sample?
Present two different approaches to find the pertinent
measure here.
8.
What is the expected defense budget for a year where GNP is 3218.2?
9.
Generate the residuals at each value of X, and present them sorted from largest to
smallest.


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