**Question:** Estimate the equation: π΅π»π΄π
π = π½0 + π½1πΆπππ π‘πππππππ + π½2πΏππππ + π½3ππ΅π + π½4πΏππ£ππππππ + π½5πΆπΉπΈπ + π½6πΈπ₯πππππππππ + π½7ππππππππ + π½8π
ππππ‘ππ£ππππ§ππ + π½9πΆππ βπ + ππ where the variables are defined as above for each deal π.

06 Nov 2023,4:08 AM

# Question 1

Open the ‘Econometrics Assignment 2023-24.dta’ file in Stata and test the hypothesis that the mean BHAR is -10% using a 5% significance level. Show your workings.

[15 marks]

# Question 2

Estimate the equation:

π΅π»π΄π
π = π½0 + π½1πΆπππ π‘πππππππ + π½2πΏππππ + π½3ππ΅π + π½4πΏππ£ππππππ + π½5πΆπΉπΈπ

+ π½6πΈπ₯πππππππππ + π½7ππππππππ + π½8π
ππππ‘ππ£ππππ§ππ + π½9πΆππ βπ + ππ

where the variables are defined as above for each deal π. Provide a screenshot of your results and discuss the magnitude and statistical significance of the coefficient estimates.

[20 marks]

# Question 3

Test the hypothesis that the effect of payment methods (100% cash paid vs. stock and mixed paid) on acquirer long-term performance differs across constrained and unconstrained acquirers.

[15 marks]

# Question 4

Discuss what is meant by the expression ‘multicollinearity’. What effects does multicollinearity have on regression analysis? How could you detect it? Check whether multicollinearity occurs in the model shown in Question 2.

[25 marks]

# Question 5

A key assumption underlying OLS regression is homoscedasticity. Explain what is meant by ‘homoscedasticity’. What are the potential consequences on regression analysis if the homoscedasticity assumption breaks down? Outline two tests you could use to detect whether homoscedasticity is present. Test for heteroscedasticity in the model shown in Question 2.

[25 marks]

**Expert answer**

**This Question Hasn’t Been Answered Yet! Do You Want an Accurate, Detailed, and Original Model Answer for This Question?**

Ask an expert

Stuck Looking For A Model Original Answer To This Or Any Other

Question?

Our skilled experts only need your instructions and deadline to help you produce an original and flawless paper.

Place Order Now