##################################
#  Keynes Data
##################################

keynes = read.table("http://faculty.chicagobooth.edu/nicholas.polson/teaching/41000/keynes.txt",header=T)
attach(keynes)

# Plot the data

plot(Year,Keynes,pch=20,col=34)
plot(Market, Keynes, xlab="Market Return", ylab="Keynes Excess Return",col=20)

# correlation matrix
cor(cbind(Keynes,Market))

# Fit the least-squares line. 

model = lm(Keynes~Market)
abline(model)
title("Keynes vs Market")

# Extract the model coefficients

coef(model)
summary(model)

# 4-in-1 residual diagnostics

layout(matrix(c(1,2,3,4),2,2))   

plot(model,pch=20)

# Calculate excess return

Keynes = Keynes - Rate
Market = Market - Rate

# correlation matrix
cor(cbind(Keynes,Market))

modelnew = lm(Keynes~Market)
summary(modelnew)