Dear Mian Sehab, What points are necessary that we need to mention in Theoretical Framework?
For a preliminary idea on writing a “theoretical framework”, kindly visit the following web page:
The page will give you any idea on building an appropriate theoretical framework for your intended research.
MVAit = αit+β1 EVAit + β2 CVAit + β3 SVAit + β4NIMit+ β5EPSit + β6 ROAit + β7CFROIit + β8 FCFit+ β9OCFit +eit
if MVA is dependant variable and other variables are independent variables than what is the result of this equation ? i think this equation tells only best independent variables for MVA and ranking of independent variables with dependent variables am i right or wrong ?
Past related literature is always consulted to get knowledge of the expected results and relations between dependent and independent variables . So, is advised you to consult the related literature in order extract such information between dependent and independent variables of your study.
if we want to compare two independent variables on incremental basis (ether they are differently associated or not ) than what type of regression we used ? please write only technique name ?
It is advised you to read the related literature and extract based upon the literature methods and techniques which have been adopted by different authors in these studies.
Dear Teacher can we shows different regression equation in one arithmetical model?
It is advised you to consult base articles and other related literature to get knowledge that is done in previous by different scholars. Study of relevant literature will help you out in understanding and formulation of research model(s) of your study.
Is that possible we develop more than one regression equation from one theoretical model or frame work ?
You have been guided about this via email, please check your email. It is advised you to study the research articles relevant to your topic. Study of relevant literature will help you out in understanding the variables, expected relations that may exist among them, model(s) of the study etc.
Assalam o Alaikm Sir,
Kindly tell me how to calculate the denominator in Appraisal Ratio i.e the unsystematic risk .I am asking you because I couldn’t find its answer though I searched a lot.Please tell me the exact formula for calculating the unsystematic risk.Please show with example.
Appraisal Ratio: Alpha_p/(Vol of non-market risk). Suppose you run the following regression: Rp-Rf = Alpha + Beta (Rm-Rf) + e.
Then, the volatility of “e” represents the non-market risk or residual risk – or the extra risk you take over the benchmark. Intuitively, the appraisal ratio trades off the extra return you receive by investing in the active portfolio, versus the extra risk you take.
You can calculate the volatility of the idiosyncratic risk by: volatility of the non-market risk = sqrt[ (Vol of Portfolio)^2 – (Beta*Vol of Market)^2 ].
Appraisal Ratio:An Example Portfolio P: Alpha=1.63, Beta=0.69, Vol = 6.17. Portfolio Q: Alpha=5.28, Beta=1.40, Vol=14.89. Benchmark: Vol =8.48. The non-market risk taken by P is: SQRT(6.17*6.17 – 0.69*0.69*8.48*8.48)=1.95. The appraisal ratio for P is: 1.63/1.95 = 0.84.
The non-market risk taken by Q is: SQRT(14.89*14.89 – 1.4*1.4*8.48*8.48)=8.98. The appraisal ratio for Q is: 5.28/8.98=0.59. Thus, P has a higher appraisal ratio and should be preferred.
Assalam o Alaikm, I am using monthly return of mutual funds in my research so to calculate Ra – Rf i.e risk premium which risk free rate would be most suitable and would give more accurate answer out of 6 months KIBOR rate , 3 months KIBOR rate .What is the significance of the two. Please do not tell me that we should explore ourselves because I have been looking for the answer to my question for such a long time but to no avail.
First of you should know that KIBOR is used for interbank loaning and advances not for investment comparison. Secondly, rate on T-bills is considered risk free because there is a certificate on back of it which guaranteed by government of the state while KIBOR is determined by central bank of the country on the basis of economic conditions as well as demand and supply of money KIBOR itself does not have any security back of it.
In fact it is used for transaction and international trade purposes which cannot be considered as Risk Free for investment purposes. So, when we come to the security or investment analysis then Deposit or T-Bills rate is considered and taken as risk free. Now, come to the point which t-bills rate should be used? For this purpose you need to review interest rate theories and term structure of interest rates. Term Structure “Facts” 1) Interest Rates of different maturities tend to move together 2)Yields on short-term securities are more volatile than yields on long-term securities 3) Long-term yields tend to be higher than short-term yields.
You should focus on second point “Yields on short-term securities are more volatile than yields on long-term securities” means more the short term period of a security then more volatility in the expected yield on it So, to adjust volatility upto some extent at starting point 6 months rate is considered better to take.
Sir my question is about Multivariate regression
. Taking the adjusted Rsquared from the pair wise regression, and subtracting the individual R-squared for each of the independent variables obtained in the earlier uni variate regressions, yields the incremental value-relevance of various independent variables.Please give any example when we use this technique ? can we use linear regression when we want to find incremental value-relevance of various independent variables? is that possible we use linear regression and find Good result from linear equation when we want to find incremental value-relevance of various independent variables?
As earlier, it was guided you that multivariate regression is simply the multiple/multi variable regression where your model consists of more than one independent variables. Your study will be based upon panel data regression (and obviously multiple regression) analysis. However, specific technique of panel regression will be decided based upon different diagnostic tests that will be applied on your data of study.
Moreover, you are perhaps talking about step wise technique of multiple regression analysis in which impact of each independent variable is tested one by one on dependent variable and then it is analyzed that how much it has improved (value added) the adjusted R square. There are almost ten independent variables in your study and if you will go for this technique that means you will run more than ten regression analysis in your study. However, if you are talking about multiple analyses of variance (MNOVA) then that technique is more suitable for time series studies consisting primary data.
It is advised you to first consult the literature review on the topic conducted by other authors and analyze what panel data tests and techniques they used in their study. It will also help you out in understanding the technique(s) which are considered appropriate for such studies.
Why we need to collect Data more than 1 accounting cycle ? one accounting cycle period is not enough for research ?
What is meant by you one accounting cycle? In academics, this refers to only one accounting period. Data for study must consist of at least one business cycle.
If we have three main heads of independent variables and under the head of each variable we have three more independent variables and we have only one is dependent variable and we want to check the relation ship of each independent variable with dependent variable and also want to check the relationship the relationship of heads of independent variable (among each other) then is that possible we make three or four model for research ? i think only 1 model is enough in this situation ?
You had answered to one of the panel members during your proposal defense that you r study is based upon only one model rather three. Even panel member ensured more than once from you about it, upon which you confirmed that you have only model for study. Thereafter, it is instructed by him to modify the regression equation accordingly as it is one model so, one regression equation is needed to test.
Detailed minutes of the meeting will be forwarded to you soon that will carry suggestions / changes given by all panel members based upon your proposal defense.