Imagine that you are the CEO of a public company who isinterested in understanding the performance of opening prices. Youopt to investigate the effects of national income and the federalfunds rate on the opening price of the company’s stock. You run aregression based on time series data from 1998 to 2014 anduncovered the following results: (a) What is your dependent variable? (b) What is the error sumof squares? (c) Which of the variables is most likely to affect theopening price of the company’s stock? Why? (d) Explain the resultof the coefficient of determination (e) What are some of theprobable deficiencies of the regression model?
