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ASSIGNMENT #3

Vanessa Jafri
5.14, pg 155
(a) The first e!ati"n "f the #efiniti"n "f $"ne% see$s t" &e '("se(% re(ate# t" the
n"$ina( GN) as gi*en in ta&(e 5.+.
(&) It #"es n"t $atter &e'a!se the ,-. "f e*er% regressi"n e!ati"n is high /hi'h $eans
that 001 "f the *aria&(es are e2p(aine# thr"!gh GN), th!s "!r #e'isi"n f"r $"ne% #"es
n"t $atter.
(') if 3E4 /ants t" '"ntr"( the $"ne% s!pp(% then regressi"n e!ati"n 1, is a &etter target
f"r this p!rp"se &e'a!se an in'rease "r #e'rease in M1 /"!(# $a5e a signifi'ant 'hange
in the GN), as the '"effi'ient is (arge.

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