Narsee Monjee Assignments April 2022 Estimate a regression

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Quantitative Methods for Valuation

1. For the given dataset (Crime)
a. Make a scatter plot of crimes and temperature. Discuss the results in terms of any possible relationship between these two variables.

b. Run a regression model with Crimes as the dependent variable and temperature as the independent variable. Discuss the significance of the results and how could this results be used to confirm or dismiss the results from (a).
c. Estimate a regression model with Crimes as the dependent variable and temperature and week as independent variable. Discuss the relevance of the inclusion of week dummy in the regression as compared to the results obtained in (b). (10 Marks)

2. For the given dataset (Salary)
a. Estimate a multi-variate regression model with Salary as the dependent variable; Rating and Experience as the independent variables. Discuss the results with the relevance of each variable in the model.
b. Estimate another regression model with Salary as the dependent variable; Rating, Experience and Certification as the independent variables. Discuss the model results in comparison with the results from (a) and comment on the usefulness of the inclusion of the variable, Certification. (10 Marks)

3. Case:
a. You are trying to understand the performance of Indian stock market in relation with the performance of Indian Economy. If you are to prepare a simple mutli-variate regression model to study the above relationship, how would you prepare the model? Discuss the list of variables, its relevance and source of data for the above analysis. (5 Marks)

b. In the above analysis, if you were to analyse whether there is a presence of a month of the year effect in Indian Stock Market, how would you modify the analysis using a dummy variable? Discuss the concept of dummy variable trap and how you could avoid that in the current analysis. (5 Marks)

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+91 9422028822