4. Discussion
Using your web browser and your own judgment and your class notes, please interpret and discuss the strength of the relationship between stock price returns for your firm (Amazon) and each of the three variables. In particular, please consider whether or not you think that the three variables do a good job in explaining and predicting stock returns for your firm. Please also explain why you think the model produced all results from questions 2 and 3 that it did.
The professor directions:
Hi Fanar, thanks for the mail. To guide you through this problem and its
organization,
The first thing you want to do is look at your results to see which independent variable(s) are statistically significant. It is for this reason that I asked all of you to include your summary output charts for all the regressions in 2a (part a, b, and c), 2b, and 3a. Although it happens less frequently, the risk-free rate can also turn up as
significant. Your discussion should start with which of these variables, if any, are statistically significant. This should be the focus of the first paragraph.
The focus of the second paragraph should include a summary of the economic interpretations for these variables only. These were provided in the email that I sent through the Canvas site last week.
Finally, and using these economic interpretations, please perform a google search to try to understand why these variables are important in driving the stock price performance for your company remembering that the stock price performance is an indicator of the performance of the business itself.
Please focus your organization and structure in your response to question #4, on these points. After doing this, please let me know if you would like me to look at it and if so please also include in your response the summary output charts so that I can verify which variable(s) are statistically significant and can guide you more closely. I hope this
helps. Thanks Fanar.
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