IB9W00 Quantitative Methods for Financial Management
Quantitative Methods for Financial Management
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IB9W00
Quantitative Methods for Financial Management
Instructions
Note that this pseudo-paper is only for the training of the
online test system. It has no relation to the actual class test.
Please do not use it for your preparation for the test. The
short question in this pseudo-paper comes from seminar 1.
This is an Open Book examination.
Please answer ALL questions
(Continued.../)
Page 1 of 3
Question 1 [0 marks]
Suppose that, at the college level, the average GPA for students after the fall term is
determined by
colgpa = β0 + β1hsperc+ β2sat+ u (1)
where hsperc is the percentile in the high school graduating class (defined so that,
for example, hsperc 5 means the top 5% of the class), and sat is the combined math
and verbal scores on the student achievement test. We estimate the MLR model (1)
through OLS and get the following results:
Note: In the output β0 is labeled cons, β1 is labeled hsperc and β2 is labeled sat.
Note that this pseudo-paper is only for the training of the
online test system. It has no relation to the actual class test.
Please do not use it for your preparation for the test. The
short question in this pseudo-paper comes from seminar 1.
1. What is the predicted college GPA when hsperc = 20 and sat = 1050? [0 marks]
2. Suppose now that two students (A and B) graduate from the same high school
and are in the same percentile hsperc, but A’s SAT score was 200 points lower.
What is the predicted difference in college GPA for these two students? [0 marks]
3. Holding hsperc fixed, what difference in SAT scores leads to a predicted colgpa
difference of .50, or one-half of a grade point, between student A and B? Com-
Page 2 of 3
ment on your answer. [0 marks]
Note that this pseudo-paper is only for the training of the
online test system. It has no relation to the actual class test.
Please do not use it for your preparation for the test. The
short question in this pseudo-paper comes from seminar 1.
End of Paper