Consider the monthly stock price data for Microsoft Corporation attached as “MSOFT23” and answer the following .A. Estimate the following regression model by using MSFT stock price as dependent variable and SP500 market index and time trend dummies as independent variables. Use the full sample and report the estimation output and residual graph from EViews/R program. MSFTt = b0 + b1 SP500t + b3 Time + b4 Time2 + et B. Discuss important statistics in the estimation output above and the characteristics of residual distribution. Can you tell whether the autocorrelation and heteroscedasticity problems exist in the estimation by just looking at the residuals? Why or why not?

Consider the monthly stock price data for Microsoft Corporation attached as “MSOFT23” and answer the following .A. Estimate the following regression model by using MSFT stock price as dependent variable and SP500 market index and time trend dummies as independent variables. Use the full sample and report the estimation output and residual graph from EViews/R program. MSFTt = b0 + b1 SP500t + b3 Time + b4 Time2 + et B. Discuss important statistics in the estimation output above and the characteristics of residual distribution. Can you tell whether the autocorrelation and heteroscedasticity problems exist in the estimation by just looking at the residuals? Why or why not? C. Perform the DW test and find if the autocorrelation problem exists among the residuals. D. Perform the Breush-Pagan test and find if the heteroscedasticity is a problem in the estimation. Show the testing results and explain. E. Re-estimate the regression in A after removing the autocorrelation problems. Report your final estimation results and residuals. Explain how you were able to correct the autocorrelation problem in this estimation