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Paper # One: The paper is to be submitted on a timely basis and in a




Paper # One: The paper is to be submitted on a timely basis and in a;professional manner. Late papers are penalized up to 10% of the papers;weight (1 point/business day). Papers may be completed individually or;in groups of two, three or four (five in rare cases) with students from;either section. The paper is to be submitted in paper or hardcopy form;fax or e-mail will be accepted ONLY by explicit permission under unusual;extenuating circumstances.;1- Develop a simple regression econometric model using one;independent variable to explain the short-term, risk-free rate or yield;(e.g., 90-day U.S. Treasury bill) dependent variable. Use monthly data;over a recent business U.S. business cycle (e.g., 2002 to 2014).;Consider selecting one independent variable from among monetary;fiscal, economic, financial, political, demographic and/or other factor you;believe relevant. Do not use another interest rate as an independent;variable.;2- State and justify the null and directional (when warranted) alternative;hypothesis for the model.;3- Compare (e.g., T-statistic, R-square, SER) the simple regression model;with another model evaluating the same period of time using the implied;three-month forward rate of interest computed by pure expectations;(lagged three months) as the independent variable.;4- Evaluate the term structure hypothesis best supported by the results;of the second model.;5- Ensure you provide simple or descriptive data for all dependent and;independent variables used in the two regressions to include the threemonth and six-month rate for the second model.;5- Present your findings in a report of approximately three to five pages;(excluding tables, statistical output and/or graphs). Briefly provide a;context of the economic and financial environment for the variables;tested. The paper is due October 4, 2014.;Professor: William Handroff;FINA 6274: Corporate Financial Management;George Washington University;Assignment # 1: Simple Regression Econometric Model;Student Name: Khaled Derbas;Student ID: G47338919;September 04 2014;Fall 2014;1- The Variables;The independent variable will be the percentage change in M1 which is by definition the money;supply that includes the most liquid components of the money supply as it contains cash and;assets that can be converted quickly into currency as an examples: physical money, current;accounts, debit cards and demand deposits.;The dependent variable will be the 3 month Bankers Acceptance interest Rate which is by;definition A short-term debt instrument issued by a firm that is guaranteed by a commercial bank.;Data of the both variables are observed on monthly basis in the period between January 1988 and;June 2000.;2- Regression Model and Hypothesis Testing;We will run simple regression model testing the following hypothesis;Higher % M1 is associated with lower Bankers Acceptance interest rates.;Null hypothesis: 1 0;Alternative hypothesis: 1 < 0;Money supply;;Monthly Interest Rate for swaps;http://www.federa


Paper#30483 | Written in 18-Jul-2015

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