Zeng turns his attention to developing a regression model to predict stock marke

Question

Zeng turns his attention to developing a regression model to predict stock market returns using the growth rate of GDP. He considers quarterly returns of the S&P; 00(S&P;) as a praxy for stock market returns and quarterly changes in GDP as GDP growth rate (GDP Growth)- The lhnear regression model is as follows s-?0+ ?1(GDP Growth) + ? Zeng develops the following partial ANOVA table and regression statistics hased on the last 10 years of quarterly data pertainimg to the S&P; 500 and GDP ANOVA Regression 1 108 Residuals 38 To be calculated 9 155 Regression Statistics Coefficient Std Error Intercept 05125 Slope 3426 0053 Zeng draws inferences using the following values from the t-distrihution and P-distnhution. One-tailed t-distribution table dfp-0005 p-0.01 p-0.025 p-005 p-0.10 56 26665 23948 2.0032 16725 1.2969 7 2/6649 23936 2.0025 1.6720 1.2966 SB 26633 23924 2.0017 16716 1.2963 59 26618 23912 2.0010 16711 1.2961 60 26603 2.3901 2.0003 16706 1.2958 36 8.9430 73956 5.4712 41132 28503 38 8.8821 73525 5.4463 4.0982 2.8424 88279 73141 5.4239 4.0847 28354 42 | 8.7791 | 7.2796 | s.4039 4.0727 | 2.8290 4 8.7352 7.2494 53857 4.0617 28232 886590 7.1942 535414.0427 28131 0 86258 7.1706 53403 4.0343 28097 The standard error of the estimate for Zeng's model is closest to B0.0534 C1.1190

Explanation / Answer

here SS(residual)=SSE =155.5-108=47.5

hence std error of estimate =sqrt(SSE/(n-2))=sqrt(47.5/38)=1.1180

option C is correct

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