I don't know. So that's why I want to share what I'm going to be building.

So
today's agenda. So, before I start my lecture because we know that is a two hour
lecture, so normally we have a break after the first one, but for somebody who's on
lecture in a chart, they may they may prefer to have no break and they will be
continuing for one and a half hours and then you have a very long rest. So, which
option you prefer

So, if you don't agree, and then raise your hand

one to help you so it's mostly

okay okay. So this is the first lecture

so there's our technology. So in theory, you need to take full our lectures running
from week one to 11. So for my part, because there will be two modules for this
module we can see that from the from the engine, so I will cover the first part, so
I will only run the section for five weeks and they can deploy you one must have
arrested with pain over the moderate route. So my thought I would just introduce a
very basic ECMO matrix, like the very basic linear regression. So one dependent
variable and one independent variable and slightly with one variable and multiple
independent variables. And then we introduce some test for the linear regression.
And then we need to discuss about the crucial issue in particular because this is
the potential endogeneity and which type of tools you can use to solve that
potential instability problems. So it could be IV or could be the general
particulars. And then finally, we move to the final week and the modules, which
means the pending marble should be yes or no one can we use a dummy variable as our
dependent variable here? So this is all the contents I will cover in my okay. So
you need to take whole our lectures every week, and you're supposed to pay seminars
also. Normally should be everything, but at least you should notice, because we
have gone down. So because we did not restart but it is changed or my if my
understanding is all my they have been scheduled to change three and five, and I
don't know why. But this is what I can see from the tunnel. So because this is a
small group session, so normally we'll be around 30 or 35 students in the seminar.
So you would have your notes on the table to see you are enrolled in reached
standing. So while we appreciate that sometimes we will not be able to make that
small if you can't make it because you will see the class teacher you should be
thinking there is his contact information. Also showing in the Canvas page includes
how last load job a message to danger to ask. II can accommodate you to switch to
another slot for things to be hands on. As you still have space to attend the
seminars. The lectures will be recorded and it will start recording here because
it's just a casual place. So, each lecture will be recorded, but seminars won't be
recorded. But we probably will We will upload the solution of the standard question
once we have done by the end of each week. Okay, so this is the same here. So if
you need any further support, from my style of running across switches, feel free
to let us know I believe that you know my email I guess from the cameras. I also I
want to reinforce my office hour normally will take place on Mondays from 11am And
suppose that the stakes are low level as in house. So I'm based in room 145 in the
University House, but not in the extension area, not at Mary's Place on the
outside. So you can appeal is a coffee shop at the ground floor to the coffee shop.
There'll be more information about this one

another thing is these modules is my full time. lecturers are very nice. If I want
to point out any points on the slide is composable. So but it's not for you. So I
will try to do everything on the whiteboard to make sure I can find it and you can
see that so we only recommend the first one is the main as just the introductory
matrix for fine is the also the surprise groups. So this is the main one which is
closely linked to our lecture guys. And another one is that I think so because for
some food like how can we how can we guarantee this is the least way how can we
make this is the best piece of estimations? There are some few steps I will show
you in my lecture because I don't have enough. If I can have eight hours lecture
every week I will show you that every single step. So then you need to go to read a
textbook. All of these approvement will be shown in the appendix in those
textbooks. So I strongly recommend you also read the textbook. I'm contacting the
library team right now. We try to fix our resources for these for this module. Then
we click the link about the evolution of the test. If you can get to here we are
giving this one. This is for texting. So I'm trying to get my recording we have any
questions so far.

So we have done the stickiness and then

so we started with about the very beginning. So you will have a question, what is
about the question, why should we have depression? So what is the meaning of the
word motivation to us? Our relationship to viruses can you try to use the question
is very general idea. I will give you a specific such as II introduce myself my
name is so such as a question. I wonder what factors can affect my personal income
and so it could be a very specific research question. So based on this question, we
know that the outcome variable we are going to look at should be your personal
income level. And you wonder what variables in both factors can affect the income
level. So when we get to some examples such as gender because we always discuss
about the gender, the white potential pay gap, so the gender vertical is a one,
your education level. So the ones you know that if you achieve that available, I
were involved in undergraduate students so the educational attainment education
level it could be the other things about your experience. So this is just like we
know that we can prove those variables into our question to evaluate the impact of
each like the gender education and experience working on your personal income
level. So this is we try to build up a relationship between those variables to
clarify specifically, as I extend to one year study, how the percentage of income
will be increased. So this is the question attempt to answer this type of research
question specifically. So this is the Genesis here. So normally, this is the
terminology you normally use the variable y could be no or sometimes we call it as
the request or the impact Barbeau explain variable outcome. And we use the X X
could be X 1x Two T x k and sometimes we use two three No, they always say the
outcome of our recording as the independent variable requestors causal variables or
explanatory variables. So as I mentioned them before, because they're about the
case where the income level it could be multiple factors will affect your income
levels. So they could be as many as variable as possible to include in a morning
God as we start from the very basic one. So for today's lecture, we start one
verse, one extended variable for a regression. Also, for the simple linear
regression we only have one slide okay. So this is the simple concept of
regression. So, we say these things are real questions trying to build up a
relationship between the explained are explained or there is another concept called
the correlation. So, what is the difference between correlation and regression? So,
if we say that verbal y and the variable x are correlated, it means that we are
treating the verbal acts in a completely symmetric way you will understand this.
So, just know if we believe theories of positive correlation between the y and the
x, we say we are saying that x and y a move in the same direction. So, it really is
a negative correlation between x and y and then as X and the Y move in the total
opposite so, but it was a requested thing we want to discuss we tried to intervene
if we observe a change in the x variable, these change in the x will lead to which
type of or what percentage of change in the y So, we know that we try to use the
change in the x to x exploring in the Why don't we call it there's not a thing
called correlation

or regression when there is one move, what is the what is the response of the why.
Okay, so, people this is very important here. Okay. So that's why we say that any
regression we treated fellows dependent variable Y an independent variable x very
differently. And specifically, we assume the dependent variable, Y seems to be
random of the caustic in some way to have a probability distribution. So there are
multiple key words random and then the probability distribution How can we
understand this? So if you have a very simple case, mentioned so many times and the
rise of the textbooks, suppose. So suppose I have gone to dice, and then I try to
struggle every single time to see the style of the two dice. So we wonder for the
specific value for the style of the two dice, we may have the secret of arise a set
of the Verizon values, who gave what is the minimum value next one? What is the
maximum

so, we should all each and we can go for the talks and we can get the specific
value of these specific value or these specific values. So then, we use the lens to
be know the probability or we say the likelihood, we may have these values and then
after multiple times of throwing a few times, and then we can show the distribution
of the affinity that you will get a specific value will fold out these shapes, like
this is the back of the normal distribution. So this is just the probability
distribution to show you the chance of the likelihood a specific event will have as
well. So if we say that the value of y at random so because we can predict the
sound of the stars, so we know that this probability distribution is randomly
distributed. So we believe that this value is just random, okay. This random
distribution of Y is unpredictable or we call this the stochastic but the
independent variable x however, we assume that it takes values and repeated
samples. We will discuss these in more detail just the values of independent
variable explanatory variable is large, randomly distributed, we try to be the
value of anything samples length sequences about wire X in the question today about
this one, okay, move on. Okay, so say that we start from the very basic case for
simplicity, we say that we only have one explanatory variable here. So, why is only
dependent on only one external variable x. So, this is just a general term we try
to introduce some specific case to reflect the return. So in the first case, you
can wonder how assets because the dairy market the y variable should be and then
the X level should be level at the level of valleys how to generate a model
measuring the long term relationship between price and theta. So, we know the
dependent variable y could be stock prices and freedoms. And the third one is just
constructing an optimal hedge ratio, because we know that the hedge ratio is
defined as the total value of hedge position divided by about the market exposure.
So, definitely we understand the relationship between the physician and the markets
function. So, this is a very classic case here. So, you understand this is just one
to be totally another. So, we have a very clear case. So, this is the reserve
product when you start with your MSC dissertation. So, suppose we are lucky enough
to have the data managers who just sit as triple x this is the company and then you
have the information of the excess return which is the return of the specific
portfolio minus the investment. So, this is the deformation of a specific specific
fund. We have the information for this horrible and also we have the excess return
on the market index to be about this. And then, how many countries data we have? We
only have five computers so, that kind of thing or thinking about that user input
issue think about the excess return of a specific form. What is the relationship
between these excess return and you want to think is a good one. So, we're gonna
get a higher so we call this data economy. So, we expect the relationship could be
positive. Okay. So, this is our integration. So why do you want to use a comeback?
Because we have the bases the previous information we get from the video. So we
want to use this data if our intuition makes sense. Okay, so how can we do so, we
can use each pair of value for each term here to make a Port Au is in the diagram
and this we call these things this canto. So how do we do that? Seven depends on
you want to use which barcode on the x axis and the Y axis and these things because
we want to know that if the market conditions were pretty specific AppFolio will
tell us that the excess return on market portfolio assets that reduce excess return
as the y axis we only have five because we only have the information for five
different time periods. So this is the scattered form. So January because the but
this is the quantitative analysis only a positive issue. If we want to have to
quantify relationship by percentage How can we get so normally we try to draw a lot
right
like doing what you saw, so this is sometimes these reasons why things are number
one

very close to apologize

so, if we try to find out a linear relationship as measured we need to discuss a

range so we need to have a straight line. So we tried to have a straight line all
these two points. It could be tied to those you have a line like things. If I think
those shrink, we have a blue lie like face. They all show the similar chat positive
relationship. But if I extend this one it will show different intersect. So coupIe
the difference love to be baited into several queries are from A to B now for these
random different intercepts, and neither so please is that like if you want to draw
a lot to discuss the linear relationship between those two variable, it could be
multiple cells. The linear regression the best one? We're mission is we tried to
find out the best what is try to including as many points as possible. But also I'm
trying to include as many as possible sweet industry this is a good part, as well.

Transcribed by https://otter.ai