THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION

question 221

Essay

THE NEXT QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION:
In a study of foreign holdings in Egyptian banks,the following sample regression results were obtained,based on 14 annual observations:
= -3.25 +
-
+
,and R² = 0.92,
Where the numbers in parentheses under the coefficient estimates are the estimated coefficient standard errors,and
y = Year-end share of assets in Egyptian bank subsidiaries held by foreigners,as a percentage of total assets
x₁ = Annual change,in billions of Egyptian pounds,in foreign direct investment in Egypt
x₂ = Bank price-earnings ratio
x₃ = Index of the exchange value of the Egyptian pounds
-Test the null hypothesis that β₂ is zero,against the alternative that it is negative at the 5% significance level,and interpret your result.

Evaluate algebraic expressions by substituting given values for the variables.

Understand the concept of absolute value and its use in evaluating expressions.

Perform operations on algebraic expressions involving exponents and radicals.

Understand the process and significance of check clearing including transit and processing float.

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Definitions:

Horizontal Sum

In economics, the process of aggregating demand curves of different individuals to derive the market demand curve.

Inferior Good

A type of good whose demand decreases as consumers' income rises, contrary to what happens with normal goods.

Substitute Goods

Products or services that can be used in place of one another, where an increase in the price of one leads to an increase in demand for the other.

Complementary Goods

Goods that are often used together, where the use or value of one increases when used in conjunction with the other.