Show transcribed image text Question4 You want to examine whether a firm's growth opportunity is positively associated with its stock return performance. To do that, you collect data on growth opportunities and the stock return for 300 public companies. This dataset is yearly data and lasts for 22 years. Therefore, you have a panel data to test this relationship, and you intend to use OLS regression on this test. 1) Discuss the advantage of using panel data in this situatio cross sections or time series. rather than pure [10%] 4 2) Set up a regression that is suitable to test the relations growth opportunities and its stock return performance. between a firm's [10%] 4.3) Discuss the purpose when we use panel data. of adding the entity fixed effect and the time fix [10%] rd errors regression based on [10%] 4.4) Discuss whether the testing result is plausible in the OLS regression using the homoskedasticity-only standard errors. 4.5) Discuss whether the testing result is plausible in the OLS regression based on using the clustered standard errors in this case.
Question4 You want to examine whether a firm's growth opportunity is positively associated with its stock return performance. To do that, you collect data on growth opportunities and the stock return for 300 public companies. This dataset is yearly data and lasts for 22 years. Therefore, you have a panel data to test this relationship, and you intend to use OLS regression on this test. 1) Discuss the advantage of using panel data in this situatio cross sections or time series. rather than pure [10%] 4 2) Set up a regression that is suitable to test the relations growth opportunities and its stock return performance. between a firm's [10%] 4.3) Discuss the purpose when we use panel data. of adding the entity fixed effect and the time fix [10%] rd errors regression based on [10%] 4.4) Discuss whether the testing result is plausible in the OLS regression using the homoskedasticity-only standard errors. 4.5) Discuss whether the testing result is plausible in the OLS regression based on using the clustered standard errors in this case.
