For given problem predict the total return on stocks when the inflation rate is 5%.
Problem
The following are data on annual inflation and stock returns. Run a regression analysis of the data and determine whether there is a linear relationship between inflation and total return on stocks for the periods under study.
|
Inflation (%)
|
Total return on stocks (%)
|
|
1
|
-3
|
|
2
|
36
|
|
12.6
|
12
|
|
-10.3
|
-8
|
|
0.51
|
53
|
|
2.03
|
-2
|
|
-1.8
|
18
|
|
5.79
|
32
|
|
5.87
|
24
|