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The document summarizes the results of an analysis of factors influencing stock indexes using least squares regression. It finds that a 1% increase in investment is associated with a -0.23% decrease in stock indexes, while a 1% increase in inflation leads to a 1.91% increase and a 1% rise in unemployment correlates with a 0.34% increase in stock indexes, all else equal. The regression has an R-squared of 0.34, indicating the model explains 34% of the variation in stock indexes.

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40 views1 page

Naseer

The document summarizes the results of an analysis of factors influencing stock indexes using least squares regression. It finds that a 1% increase in investment is associated with a -0.23% decrease in stock indexes, while a 1% increase in inflation leads to a 1.91% increase and a 1% rise in unemployment correlates with a 0.34% increase in stock indexes, all else equal. The regression has an R-squared of 0.34, indicating the model explains 34% of the variation in stock indexes.

Uploaded by

naseer_satti
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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E-VIEW RESULTS:

Dependent Variable: stock index Method: Least Squares Date: 06/21/12 Time: 03:56 Sample(adjusted): 1984 2010 Included observations: 27 after adjusting endpoints Variable C inv inf une R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat Coefficient -0.014298 -0.232928 1.916642 0.340972 Std. Error 0.057322 0.643637 1.076686 0.364011 t-Statistic -0.249433 -0.361894 1.780130 0.936707 Prob. 0.8052 0.7207 0.0883 0.3586 0.066438 0.174271 -0.743960 -0.551984 3.170514 0.043491

0.292559 Mean dependent var 0.200284 S.D. dependent var 0.155845 Akaike info criterion 0.558614 Schwarz criterion 14.04346 F-statistic 2.096337 Prob(F-statistic)

INTERPRETATION:
The dependent variable in this result is shown as stock Index and the independent t variable used in this analysis are investment, inflation, unemployment. The coefficient values are the constant values and are known as intercept. these values are constant for all every variable. E.g the value written against investment in coefficient column shows -0.014298 value. This is the value which is constant and it remain constant either there is no change in investment because of other variables. The value of intercept for stock index is -0.0142 which is constant for all independent variable. The value of coefficient of total investment is -0.2239 which means that 1% increase in total investment leads to -0.23% decrease in stock index while keeping all other factors constant. The error term for total investment is 0.057322. the value of t-calculated for total investment is 0.361894. the value of probability for total investment is 0.7207 which is greater than 0.5. 1% increase in inflation leads to 1.91% increase the error term for in stock index while keeping other factors constant. The standard error term of inflation is 0.643637. the value of tcalculated for independent variable inflation is -0.361894. the value of probability for inflation is 0.0883.
1% increase in unemployment leads to 0.34% increase in stock index while holding all other factors constant. The standard error term for unemployment is 0.364011 which tells the chances of errors. The

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