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Task 4 - Logit Exercise
Task 4 - Logit Exercise
Task 4 - Logit Exercise
Given this output, you know the equation of the model is:
log ( 1−pp )=−0.05+3.49∗oepspw
Where p=Prob(r ¿ =1∨oepspw)
Instructions: answer the following:
1. What is the value of oepspw for Agilent Technologies, Inc (ticker: A) in Q4 2001?
-0.04977
2. Calculate the log (odds) for Agilent Technologies, Inc in Q4 2001.
-0.22416
3. Calculate the odds in favor of having a higher return than the industry for Agilent
Technologies, Inc in Q4 2001.
0.7957
4. Calculate the probability of having a higher return than the industry for Agilent
Technologies, Inc in Q4 2001.
44.31%
5. What is the value of oepspw for Agilent Technologies, Inc in Q1 2002?
0.02725
6. Going from Q4 2001 to Q1 2002, what is the increase in oepspw for Agilent
Technologies, Inc?
0.022517
7. What is the effect of the increase in oepspw on the odds in favor of having a higher return
than the industry for Agilent Technologies, Inc?
1.0818 times
8. Calculate the odds in favor of having a higher return than the industry for Agilent
Technologies, Inc in Q1 2002.
0.8608
9. Calculate the probability of having a higher return than the industry for Agilent
Technologies, Inc in Q1 2002.
46.26%