Economics 2223A/B Study Guide - Quiz Guide: Normal Distribution, Null Hypothesis, Root Mean Square
10 Dec 2018
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Due march 8th at the beginning of the class in which you are registered. An analyst believes the salary of a ceo (salary) depends on the annual rm sales (sales), return on equity (roe), and return on the rm"s stock (ros). The analyst speci es a linear economic model log(salary) = 0 + 1 log(sales) + 2roe + 3ros + . With this setup, please do chapter 4, question 2, parts (i), (ii), and (iii) from the textbook. Please answer part (i) using a parameter or parameters of the economic model. (these parameters have over them. ) H1 : 3 > 0: recall that ros is already in percentage form (see the second line in the textbook). So if ros increases by 50 then the right hand side increases by. Salary is predicted to increase by approximately 100 50 . 00024 percent (1. 2 percent). The second part of the question asks if ros is practically large.
