T-bills and inflation. Figure 10.10 (page 499) gives Excel output for the regression of the rate of return on Treasury bills against the rate of inflation during the same year. Exercises 10.57 through 10.59 use this output.

Question 10.58

10.58 The ANOVA table.

Use the numerical results in the Excel output to verify each of these relationships.

  1. The ANOVA equation for sums of squares.
  2. How to obtain the total degrees of freedom and the residual degrees of freedom from the number of observations.
  3. How to obtain each mean square from a sum of squares and its degrees of freedom.
  4. How to obtain the statistic from the mean squares.