S
staykov
Hello, I have to do a finance project and am really struggling here. I already passed the deadline and have 1 more week to do it, or I'll get 0 marks
I am doing Purchasing power parity and have to make a regression analysis, using minitab. One of the tests that I am doing is to investigate the relationship between 'The change in exchange rates' versus 'The difference in inflation rates' of two countries. I've done the regression, but now I have to say whether the numbers are good or bad and to draw implications from it. I've searched the web, but everything is very incomprehensible... Here is the regression that I've made and I believe that it is correctly done. Can someone explain what the results of the test mean?
Thank you in advance, I would really appreciate your help
I am doing Purchasing power parity and have to make a regression analysis, using minitab. One of the tests that I am doing is to investigate the relationship between 'The change in exchange rates' versus 'The difference in inflation rates' of two countries. I've done the regression, but now I have to say whether the numbers are good or bad and to draw implications from it. I've searched the web, but everything is very incomprehensible... Here is the regression that I've made and I believe that it is correctly done. Can someone explain what the results of the test mean?
The regression equation is
Change in exchange rates = - 0,0131 + 0,00357 Inflation difference
Predictor Coef SE Coef T P
Constant -0,013144 0,002931 -4,48 0,000
Inflation difference 0,003570 0,001845 1,94 0,055
S = 0,0302862 R-Sq = 3,1% R-Sq(adj) = 2,2%
Analysis of Variance
Source DF SS MS F P
Regression 1 0,0034353 0,0034353 3,75 0,055
Residual Error 119 0,1091531 0,0009173
Total 120 0,1125885
Unusual Observations
Change in
Inflation exchange
Obs difference rates Fit SE Fit Residual St Resid
8 1,13 -0,08764 -0,00910 0,00296 -0,07854 -2,61R
12 1,57 -0,07456 -0,00753 0,00334 -0,06703 -2,23R
14 -4,38 -0,15538 -0,02877 0,00949 -0,12661 -4,40RX
18 6,62 -0,03359 0,01048 0,01154 -0,04407 -1,57 X
27 -3,98 0,00050 -0,02736 0,00879 0,02785 0,96 X
31 5,37 0,00034 0,00604 0,00932 -0,00569 -0,20 X
35 0,72 -0,10906 -0,01056 0,00277 -0,09850 -3,27R
85 1,07 0,06067 -0,00934 0,00292 0,07001 2,32R
120 1,18 -0,06993 -0,00892 0,00299 -0,06101 -2,02R
R denotes an observation with a large standardized residual.
X denotes an observation whose X value gives it large leverage.
Thank you in advance, I would really appreciate your help