Download LQDE LN time series and calculate its correlation
versus S&P 500 and Treasury 10 year.
a. Run the regression of LQDE LN versus the S&P
i. If the S&P goes up by 5% in one day what will happen with
LQDE according to your regression?
ii. What are the 95% confidence intervals for the beta and the
alpha? Calculate this using R and independently using a formula
iii. Now run LQDE versus 10-year treasury and repeat exercises
1-3 for them. What do you see?
iv. Which is of the regressions in your opinion?
v. Finally run the regression with treasury and S&P as
independent variables together. Do you have better or worse results
in your opinion?
vi. Justify your answers on regressions by investigating what is
LQDE LN represents.
