A Domestic Financial Firm Has Hired You To Study The Empirical Links Between The Aus 3098985

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Q2 8 marks
A domestic financial firm has hired you to study the empirical links between the Australian All Ordinaries Index, the Hong Kong based Hang Seng, and the US Dow Jones Industrial Average. The file allord.wf1 has data on the daily returns (in percentage points) on these three financial indicators. You are to estimate an ARDL(P,Q) model for Australian returns
1. Select the appropriate lag structures to ensure that your model (i) has desirable goodness of fit properties, and (ii) is free of autocorrelation. Give your estimated equation and provide appropriate supporting outputs to demonstrate the quality of your model.
2. Write a paragraph explaining on how you settled on your specification in the previous question. Why is it better than other possible specifications?
3. ining the dynamics of returns as estimated by your model. Which foreign index seems more important for returns in Australia? How long does it take for movements in these markets to impact upon the Australian index? How well does your model fit the data, and what does this imply about financial modelling?
Q3: 9 Marks
Social scientists are often interested in the factors that make marriages successful, versus those that predict familial break up. One such factor is the presence of an extramarital affair. In the data file affairs.wf1 you have 601 observations (obtained from a confidential survey conducted by a US magazine) on this phenomenon. The variables are defined as follows:
Naffairs – the number of affairs in a given year
Age – the age of a respondent
Yrsmarr – number of years the respondent has been married
Kids – the number of children in the family
Relig – a self-assessed measure of religiosity (5 indicates highly religious)
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DUE DATE 24th MAY 5 PM ANSWER ALL QUESTIONS WITH WORKING AND INCLUDE ALL RELEVENT ECONOMETRIC OUTPUTS FROM EVIEWS NOMINAL LENGTH: 1250 WORDS EXCLUDING EQUATIONS/OUTPUTS Q2 8 marks A domestic financial firm has hired you to study the empirical links between the Australian All Ordinaries Index, the Hong Kong based Hang Seng, and the US Dow Jones Industrial Average. The file allord.wf1 has data on the daily returns (in percentage points) on these three financial indicators. You are to estimate an ARDL(P,Q) model for Australian returns Select the appropriate lag structures to ensure that your model (i) has desirable goodness of fit properties, and (ii) is free of autocorrelation. Give your estimated equation and provide appropriate supporting outputs to demonstrate the quality of your model. Write a paragraph explaining on how you settled on your specification in the previous question. Why is it better than other possible specifications? ining the dynamics of returns as estimated by your model. Which foreign index seems more important for returns in Australia? How long does it take for movements in these markets to impact upon the Australian index? How well does your model fit the data, and what does this imply about financial modelling? Q3: 9 Marks Social scientists are often interested in the factors that make marriages successful, versus those that predict familial break up. One such factor is the presence of an extramarital affair. In the data file affairs.wf1 you have 601 observations (obtained from a confidential survey conducted by a US magazine) on this phenomenon. Note that this data set is from the 1970s and social norms have changed considerably since this time. The variables are defined as follows: Naffairs – the number of affairs in a given year Age – the age of a respondent Yrsmarr – number of years the respondent has been married Kids – the number of children in the family Relig – a self-assessed measure of religiosity (5 indicates…

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7310AFE-Assig….docxaffairs.wf1allord.wf1