some concepts

hi all

Grateful if you could help n explaining the below .

1. assume annually compounded, can I say spot rate = (1/d(t))^t - 1 ?

2. what are the difference between standard error of forecast and standard error of regression?

3. what are the difference between adjusted R2 and correlation of coefficient (r )?

Many thanks again
 

ShaktiRathore

Well-Known Member
Subscriber
1) yes agree with above ,d(t)=1/(1+spot rate)^t=>take 1/t th power on both sides =>d(t)^1/t=1/(1+spot rate)=>1/d(t)^1/t=1+spot rate=>spot rate =(1/d(t))^1/t-1
3) correlation r provides for strength of linear relatioship b/w two variables while adj R^2 gives strength of linear relatioship b/w dependent variable and each of independent variables whether the ind vars significantely explain dependent variable independentely and as a whole.
Thanks
 
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