1. (10 points of paper grade) Prepare a title page for your term paper.1 It should have the format on the attached page. Of course, it is very early in the term and as such an abstract might be very preliminary. One possibility is to look at the term paper assignment and craft something. Naturally, firm size and growth is of direct interest to airports for planning infrastructure and for assessing changes in the variables that explain size and growth that might impact them. You might also focus on 911 and its impact on passengers. Be creative. Usually, I like to close the abstract (when the analysis is done) to provide a very brief line or two of findings. For this purpose, you might simply write, I find that “to be included when done.” NOTE: You must use the format on the next page to get full credit (EXACTLY). Homework Assignment 2. (2) For your airport, call your data, and plot passengers against the trend. 3. (3) Run a regression of Passengers on a trend, and quarterly dummy variables. 4. (5) Generate a scatter plot of the raw data (passengers) and the predicted values. Also, present the residuals against the trend. And, prepare a table of summary statistics (mean, median, …). 5. (20) For your model, present the model results (1), and then: a. (6) Formulate a t‐test for the idea that there is a positive trend, compared to the alternative that the market is not growing or indeed has negative growth (this is the null). Conduct your tests at the five percent level (be careful of one sided tests). b. (4) Write down the general F‐statistic in terms of the restricted and unrestricted sum of squares. Now test that the coefficients on the quarterly dummies are jointly equal to zero. Conduct the test at the 5 percent level. Be careful to identify the restricted and unrestricted models i.e., write out the mathematical models. I want two sets of results, one for the unrestricted model and one for the restricted model, then I want you to write down the F‐statistics and use the information from the ANOVA tables to calculate. c. (4) For the general F‐test, explain how you could do this with only R‐squares and then do the test in terms of R‐squares. Show that it can be done. d. (5) List the assumptions of the classical model, and then write a line or two on each in the context of your results. That is, I would like a list and a critical evaluation of each assumption. Do you believe it. e. (1) What does “BLUE” stand for? 6. Prepare a commented do file, print it out and staple to the end of your assignment.