Interview Question: OLS in Excel

Sample Question #49 (general computing – Excel)

There are at least two ways in Excel to perform an OLS regression. What are they? What are some of the limitations of doing OLS in Excel (as opposed to using a real statistical package like EViews, Stata, R, S-Plus, or SAS)?

(Comment: Excel is extremely important on Wall Street, for both quants and non-quants. If you don’t have Office on your personal computer yet, the Microsoft Office Home and Student 2007 edition is only $121.99. BTW, unlike with versions past, anyone can buy the Home and Student edition, not just students or educators.)

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One Response to Interview Question: OLS in Excel

  1. Brett says:

    ANSWER
     
    1) Use the LINEST() function
    2) Use the Data Analysis add-in
     
    Limitations: only OLS; dataset cannot be too big (improved in Excel 2007); not much statistics for inference testing 

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