Hanoi University PROGRESS TEST 1

Faculty of Management and Tourism Subject: Econometrics

Spring Semester 2020
STUDENT INFORMATION
NAME Nguyen Gia Phuong Anh
STUDENT ID 1704040005
TUTORIAL CLASS 1
DATASET* 8_intdef
(*Please copy exactly the name of the dataset in your Test Report Form)

Your file name must follow this template:

[dataset2]-[Tutorial Class]-[ID]-[Fullname]
Eg: Tut1-dataset2-1700000000-NguyenVanA.docx

ANSWER

I. Please insert the EVIEWS Screenshoot here

II. Please do interpretation questions here
For calculation questions, you should include formula/ substitute numbers to illustrate your
calculation. Answer with only final number might get 0.
I 3= ^
1.The estimated equation: ^ β 1+ β^2 Inf →^
T −bill rate=2.420319+ 0.640561∗Inflation rate

2.The intercept ^
β 1=2.420319
The slope ^
β 2=0.640561
Standard error of ^
β 1=0.463285
Standard error of ^
β 2=0.094247
2
R =0.461048
RSS – sum square of residuals= 243.8621

ESS = RSS * ( 1−R1 −1)

2 = 243.8621 * (
1
1−0.4610482
−1)= 65.82973

The general function for population: Y= β1+ β2X+ui

The estimated regression line therefore is: ^I 3=2.420319+0.640561∗Inf
Interpretation: As this estimated equation shows, the slope is 0.640561, suggesting that On
Average, if inflation rate increases by 1%, 3-month T-bill rate will go up by 0.640561 %. The
intercept value of 2.420319shows that if inflation rate were zero, the 3-month T-bill rate would be
equal to 2.420319%.

3.Hypothesis testing:
Ho: ^
β 2=0
Ha: ^
β2≠ 0
Level of significance: α=1-95%=5%
Test statistics: (t-test):
T-stat=6.796651
T-critical(tα/2,n-2)= t0.05/2,56-2=2.0105
Decision rule: t-stat>tcritical: 6.796651 > 2.0105
Conclusion: Reject Ho
There is enough evidence to conclude that the slope coefficient is significant.

4.Interval estimation:
We have 95% confidence interval for β 2: ^
β 2 ± t critical∗Se( β^2 )
→ 0.640561± 2.0105∗0.094247
→ 0.640561± 0.189483
→(0.451,0 .830)
The interval for the slope of regression is (0.451,0.830).

5.The value of R2 of 0.461048 means that around 46.1048 percent of the variation in the T-bill rate is
explained by inflation rate. This figure suggests that the sample regression line does not fit the data
very well. The coefficient of correlation of 0.461048 shows that the two variables, I3 and Inf, are not
highly positively correlated. Therefore, the result is not very good.