LEVEL 02 · 80 MIN
Regression Radar
Calibrate the regression radar.
A single signal is moving through the financial system. Calibrate a two-variable model, estimate its line, audit its fit, and decide what the evidence can—and cannot—support.
MISSION OBJECTIVES
- Specify and interpret a simple linear regression model.
- Explain the error term and zero conditional mean assumption.
- Calculate OLS coefficients, fitted values, and residuals.
- Interpret TSS, ESS, RSS, correlation, and R-squared.
- Read introductory inference and equivalent EViews/Stata output without overclaiming causality.