At the Stock and Watson (Http://www

question 30

Essay

At the Stock and Watson (http://www.pearsonhighered.com/stock_watson)website,go to Student Resources and select the option "Datasets for Replicating Empirical Results." Then select the "California Test Score Data Used in Chapters 4-9" and read the data either into Excel or STATA (or another statistical program).First run a regression where the dependent variable is test scores and the independent variable is the student-teacher ratio.Record the regression R2.Then run a regression where the dependent variable is the student-teacher ratio and the independent variable is test scores.Record the regression R2 from this regression.How do they compare?

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Financial Asset

Any asset that is cash, the right to receive cash or another financial asset, or an equity instrument of another entity, such as stocks, bonds, or derivatives.

Underlying Asset

An asset upon which a derivative’s price is based, such as stocks, bonds, commodities, or currencies.

Futures Contracts

Standardized legal agreements to buy or sell a particular commodity or financial asset at a predetermined price at a specified time in the future.

Marking-to-market

The practice of updating the value of an asset to its current market level rather than its book value for accounting purposes.