The following regression model was estimated to forecast the value of the Malaysian ringgit

Heather F.

Principles of Accounting

3 days, 22 hours ago

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Based on the following table, which lists interest rates on long-term investments (based on 10 -year government bonds) in several countries in $2008 . Assuming that you invest $\$ 10,000$ in the United States, how long (to the nearest year) must you wait before your investment is worth $\$ 15,000$ if the interest is compounded annually?

22.The following regression model was estimated to forecast the value of the Malaysian ringgit(MYR):MYRaa INCa INFtttt01121,whereMYRis the quarterly change in the ringgit,INFis the previous quarterly percentage change inthe inflation differential, andINCis the previous quarterly percentage change in the income growthdifferential. Regression results indicate coefficients ofa0= .005;a1= .4; anda2= .7. The mostrecent quarterly percentage change in the inflation differential is–5%, while the most recentquarterly percentage change in the income differential is 3%. Using this information, the forecast forthe percentage change in the ringgit is:A)4.60%.B)–1.80%.C)5.2%.D)–4.60%.E)none of these.ANSWER: BSOLUTION:MYRt= .005 + (.4)(.03) + (.7)(–.05) =–1.80%