FINANCE Corporate financial policy and R and D Management

In traditional investment analysis, a project or new investment should be accepted only if the returns on the project exceed the ...

it may still be a good project if the firm waits. Defining PVCF again as the present value of the cash flows, the firm’s decisio ...

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CHAPTER 5 An Introduction to Statistical Analysis and Simultaneous Equations I n this chapter, we introduce the reader to the te ...

must be obtained, then a plane of best fit estimated. Given an estimate of the future level of personal disposable income and in ...

can make a forecast of sales look absurd. The occurrence of a war or a change in Federal Reserve policy is a weakness of many ec ...

Y, given the value of X, is a linear function of X. In other words, the mean value of the dependent variable is assumed to be a ...

conditional probability distribution, it is assumed that this will not affect the chance that some other observation in the samp ...

term, ei, is the difference between the actual and estimated dependent vari- able values for any given independent variable valu ...

(5.5) To assure that a minimum is reached, the partial derivatives of the squared error terms function will be taken with respec ...

Rewriting these equations, one obtains the normal equations: (5.7) (5.7) Solving the normal equations simultaneously for aand by ...

The slope of the regression line, b, can be found by: (5.9) (5.10) (5.10) The standard error of the regression line can be found ...

The coefficient of determination, R^2 , is the percentage of the variance of the dependent variable explained by the independent ...

(5.14) To test whether the model is a useful model, an F-test is performed where: H 0 = α= β= 0 HA= α/β= 0 (5.15) As the calcula ...

 To discuss the role of the computer in calculating multiple regressions with any number of independent variables, and to indic ...

Just as in the case of simple regression, the closeness of fit of the estimated regression equation to the data is measured by t ...

(5.19) (5.19) Ordinarily, however, a multiple regression is carried out on a computer, which is programmed to print out the valu ...

In connection with equation (5.23), the following assumptions are made: |xti| < χ E(u) = 0 Cov(u) = σ^2 IE(X′u) = 0 (5.24) Th ...

but û′û= y′[I– X(X′X)–1X′]y= u′[I– X(X′X)–1X′]u (5.30) Hence E(û′û) = σ^2 tr[I– X(X′X)–1X′] = σ^2 [trI– tr(X′X)–1X′X0] = (T– k)σ ...

We still need to say something about the covariance matrix of u·iand u·j, i≠j. The two vectors need not be uncorrelated. Clearly ...