Ordinary Least Squares (OLS) is a method used in econometrics to estimate the parameters of a linear regression model. There are 9 key assumptions of OLS:
1) The regression model is linear in parameters.
2) Regressor values are fixed in repeated samples.
3) The mean value of the disturbance term is zero.
4) The variance of the disturbance term is constant.
5) There is no autocorrelation between disturbance terms.
6) There is no covariance between regressors and disturbance terms.
7) The number of observations exceeds the number of parameters.
8) There is variability in regressor values.
9) The regression model is
Liquidity Preference Theory suggests that investors demand higher interest rates or additional premiums for medium or long-term maturities and investments. Simply put, interest rates directly indicate the price of the money.
https://efinancemanagement.com/investment-decisions/liquidity-preference-theory
Liquidity Preference Theory suggests that investors demand higher interest rates or additional premiums for medium or long-term maturities and investments. Simply put, interest rates directly indicate the price of the money.
https://efinancemanagement.com/investment-decisions/liquidity-preference-theory
2. If you have a nonlinear relationship between an independent varia.pdfsuresh640714
2. If you have a nonlinear relationship between an independent variable x and a dependent
variable y, how can you apply the least -squares fit method? Does this work for all nonlinear
relationships? if not please give an example of a nonlinear equation where the fit method cannot
be used.(No need to use Matlab on this question).
Solution
A)The assumptions of linearity and additivity are both implicit in this specification. • Additivity
= assumption that for each IV X, the amount of change in E(Y) associated with a unit increase in
X (holding all other variables constant) is the same regardless of the values of the other IVs in
the model. That is, the effect of X1 does not depend on X2; increasing X1 from 10 to 11 will
have the same effect regardless of whether X2 = 0 or X2 = 1. • With non-additivity, the effect of
X on Y depends on the value of a third variable, e.g. gender. As we’ve just discussed, we use
models with multiplicative interaction effects when relationships are non-additive.
Linearity = assumption that for each IV, the amount of change in the mean value of Y associated
with a unit increase in the IV, holding all other variables constant, is the same regardless of the
level of X, e.g. increasing X from 10 to 11 will produce the same amount of increase in E(Y) as
increasing X from 20 to 21. Put another way, the effect of a 1 unit increase in X does not depend
on the value of X. • With nonlinearity, the effect of X on Y depends on the value of X; in effect,
X somehow interacts with itself. This is sometimes refered to as a self interaction. The
interaction may be multiplicative but it can take on other forms as well, e.g. you may need to
take logs of variables.
Dealing with Nonlinearity in variables. We will see that many nonlinear specifications can be
converted to linear form by performing transformations on the variables in the model. For
example, if Y is related to X by the equation E Yi Xi ( ) = + 2 and the relationship between the
variables is therefore nonlinear, we can define a new variable Z = X2 . The new variable Z is
then linearly related to Y, and OLS regression can be used to estimate the coefficients of the
model. There are numerous other cases where, given appropriate transformations of the
variables, nonlinear relationships can be converted into models for which coefficients can be
estimated using OLS. We’ll cover a few of the most important and common ones here, but there
are many others. Detecting nonlinearity and nonadditivity. The key question is whether the slope
of the relationship between an IV and a DV can be expected to vary depending on the context. •
The first step in detecting nonlinearity or nonadditivity is theoretical rather than technical. Once
the nature of the expected relationship is understood well enough to make a rough graph of it, the
technical work should begin. Hence, ask such questions as, can the slope of the relationship
between Xi and E(Y) be expected to have the same sign for all value.
Regression analysis is a powerful statistical method that allows you to examine the relationship between two or more variables of interest. Regression analysis is a reliable method of identifying which variables have impact on a topic of interest. The process of performing a regression allows you to confidently determine which factors matter most, which factors can be ignored, and how these factors influence each other.In this presentation a brief introduction about SLR and MLR and their codes in R are described
This 10 hours class is intended to give students the basis to empirically solve statistical problems. Talk 1 serves as an introduction to the statistical software R, and presents how to calculate basic measures such as mean, variance, correlation and gini index. Talk 2 shows how the central limit theorem and the law of the large numbers work empirically. Talk 3 presents the point estimate, the confidence interval and the hypothesis test for the most important parameters. Talk 4 introduces to the linear regression model and Talk 5 to the bootstrap world. Talk 5 also presents an easy example of a markov chains.
All the talks are supported by script codes, in R language.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
The Evolution of Non-Banking Financial Companies (NBFCs) in India: Challenges...beulahfernandes8
Role in Financial System
NBFCs are critical in bridging the financial inclusion gap.
They provide specialized financial services that cater to segments often neglected by traditional banks.
Economic Impact
NBFCs contribute significantly to India's GDP.
They support sectors like micro, small, and medium enterprises (MSMEs), housing finance, and personal loans.
2. Intro
• Ordinary Least Squares (OLS) is a method used in
econometrics, which is a branch of economics that applies
statistical techniques to analyze economic data.
• OLS is a technique for estimating the parameters of a linear
regression model.
|
3. Assumption 1: Linear regression model.
• The regression model is linear in the parameters, as shown in below
• Yi = β0 + β1Xi + ui
• that the regressand Y and the regressor X themselves may be nonlinear
• Yi = β0 + β1Xi
2+ ui
• Yi = β1 + 1
𝛽2 Xi + ui
4. Assumption 2: X values are fixed in repeated
sampling.
• Values taken by the regressor X are considered fixed in repeated
samples. More technically, X is assumed to be non-stochastic.
• It is very important to understand the concept of “fixed values in re-
peated sampling,”
• Conclusion
• conditional regression analysis, that is, conditional on the given values of the
regressor(s) X.
6. Assumption 3: Zero mean value of disturbance ui.
• Given the value of X, the mean, or expected, value of the random
disturbance term ui is zero.
• Technically, the conditional mean value of ui is zero. Symbolically, we have
E(ui |Xi) = 0
• each Y population corresponding to a given X is distributed around its
mean value (shown by the circled points on the PRF) with some Y values
above the mean and some below it.
• It requires is that the average or mean value of these deviations
corresponding to any given X should be zero.9
• the positive ui values cancel out the negative ui values so that their average
or mean effect on Y is zero.10
8. Assumption 4: Homoscedasticity or equal
variance of ui.
• states that the variance of ui for each Xi (i.e., the
conditional variance of ui) is some positive constant
number equal to σ 2.
• Technically, σ 2represents the assumption of
homoscedasticity, or equal (homo) spread (scedasticity)
or equal variance.
9. Continue…
The word comes from the Greek verb skedanime,
which means to disperse or scatter. Stated
differently. And the Y populations corresponding to
various X values have the same variance.
Put simply, the variation around the regression line
(which is the line of average relationship between Y
and X) is the same across the X values; it neither
increases or decreases as X varies.
12. Continue..
• In contrast, consider below the figure where the conditional variance of the Y
population varies with X.
• This situation is known appropriately as heteroscedasticity, or unequal spread, or
variance.
• Symbolically, can be written as
• Var (ui | Xi) = σ 2
• Notice the subscript on σ 2 which indicates that the variance of the Y population
is no longer constant.
• To understand the rationale behind this assumption, refer to Figure. As this figure
shows, var (u X1) < var (u X2), ... , < var (u Xi)
14. Assumption 5: No autocorrelation between
the disturbances.
• Given any two X values,
• Xi and Xj (i ≠ j ), the correlation between any two ui and uj (i ≠ j ) is
zero.
• where i and j are two different observation
• the disturbances ui and uj are uncorrelated. Technically, this is the
assumption of no serial correlation, or no auto-correlation.
15. we see, that the u’s are positively correlated, a positive u
followed by a positive u or a negative u followed by a
negative u. Figure a
16. The u’s are negatively correlated, a positive u
followed by a negative u and vice versa. Figure b
17. Continue..
• If the disturbances (deviations) follow systematic
patterns, such as those shown in Figure a and b, there is
auto- or serial correlation,
• Assumption 5 requires is that such correlations be
absent.
• Figure c shows that, there is no systematic pattern to the
u’s, thus indicating zero correlation
19. Assumption 6: Zero covariance between ui and
Xi, or E(uiXi) = 0
• cov (ui, Xi) = E [ui − E(ui)][Xi − E(Xi)]
• = E [ui (Xi − E(Xi))]since E(ui) = 0
• = E (uiXi) − E(Xi)E(ui) since E(Xi) is nonstochastic
• = E(uiXi) since E(ui) = 0
• = 0 by assumption
• But if X and u are correlated, it is not possible to assess their individual
effects on Y.
20. Continue..
• Thus, if X and u are positively correlated, X increases when u increases and it
decreases when u decreases.
• Similarly, if X and u are negatively correlated, X increases when u decreases and it
decreases when u increases.
• In either case, it is difficult to isolate the influence of X and u on Y.
• Assumption 6 is automatically fulfilled if X variable is nonrandom or non-
stochastic and
• Assumption 3 holds, for in that case, cov (ui , Xi)= [Xi E(Xi)] E[ui E(ui)] = 0.
• But since we have assumed that our X variable not only is non-stochastic but also
assumes fixed values in repeated samples
21. Assumption 7: The number of observations n must be
greater than the number of parameters to be estimated.
• Alternatively, the number of observations n must be greater than the
number of explanatory variables
• From this single observation there is no way to estimate the two unknowns,
β1 and β2.
• We need at least two pairs of observations to estimate the two unknowns
22. Assumption 8: Variability in X values.
The X values in a given
sample must not all be the
same. Technically, var (X )
must be a finite positive
number.
=
𝛴𝑥𝑗𝑦𝑖
𝑥𝑖
2
If all the X values are
identical, the denominator
of that equation will be zero,
therefore, it’s not possible
to estimate parameters.
For example, if there is little
variation in family income,
we will not be able o explain
much of the variation in the
consumption expenditure.
23. Assumption 9: The regression model is correctly
specified.
• What is the functional form of the model?
• Whether your model has linear in the parameter or variables, or both?
• What are the probabilistic assumptions made about the Y and X, and the u
entering the model?
Yi = α0 + α1 Xi + ui ………………1
Xi
Y = 𝛽0 + 𝛽1
1
𝑥𝑖
+ 𝜇 … … … … … 2
24. Continue..
The regression model one(1) is linear both in the parameters and the variables,
whereas the model two(2) is linear in the parameters but nonlinear in the
variables X.
If the model two (2) is fitted to model one (1), it give us wrong predictions,
between A and B for any given X, i.e., the model one (1) going to overestimate the
true mean value of Y.
Whereas to the left of A is going to underestimate the true mean value of Y.
25.
26. 10. There is no Perfect Multicollinearity.
You are correct. Perfect multicollinearity refers to a situation in which
two or more independent variables in a regression model have a
perfect linear relationship, meaning that one independent variable
can be expressed as a linear combination of the others.
In other words, there is a perfect correlation between these
variables.