Course Project Guidelines

1. Statement of the problem
   The problem to be investigated must be clearly stated. The problem area should be some aspect of finance theory or somehow related to the financial sector of the economy.
2. Model formulation
   This refers to the model, hypothesis, or theoretical framework that will be used to explain and/or predict the variable of interest. It may also focus on a particular parameter of interest, such as a financial beta coefficient. In the usual case, the model will be specific in the form of a functional relation. I would expect that you would have one dependent variable and three or more independent variables. Of course, you should make sure to have sufficient degrees of freedom.
   The model specification should also include the theoretical (a priori) signs of the coefficients. It may even be more specific in terms of the hypothesized values of the coefficients. The rationale for your model should be based upon the relevant aspects of financial and/or economic theory.
3. Data sources
   The specific sources of your data should be indicated in your paper. You should be clear as to what the units of each variable are. I would expect at least 15 time periods of data. f your model specified certain variable for which there are not readily available sources, lid you consider proxy variables?
4. Estimation procedure
   The estimation procedures include ordinary least-squares regression, univariate time series analysis, or multiple time series analysis. You should briefly explain why you elected a particular procedure.
5. Computer printout

1. You should explain the key statistical results of your computer printout(s). Among other things, you should specify the estimated function and interpret the important coefficients of your model.
2. Statistical test results - What do the t, \(\mathrm{F}\), and \(\mathrm{R}^{2}\) results mean? Are they consistent or contradictory?

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