A Regression Model Involving 3 Independent Variables for a Sample $\alpha$

question 47

Essay

A regression model involving 3 independent variables for a sample of 20 periods resulted in the following sum of squares.
a.Compute the coefficient of determination and fully explain its meaning.
b.At $\alpha$ = 0.05 level of significance, test to determine whether or not there is a significant relationship between the independent variables and the dependent variable.

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Definitions:

Long-Duration Bonds

Bonds with a longer time until maturity, typically more than 10 years, making them more sensitive to changes in interest rates.

Duration Rule

A principle that estimates the sensitivity of a bond's price to changes in interest rates, calculated as the weighted average time until a bond's cash flows are received.

Yield

The income return on an investment, such as the interest or dividends received, expressed annually as a percentage of the investment's cost.

Duration

A measure of the sensitivity of a bond's or fixed income portfolio's price to changes in interest rates, typically expressed in years.