Linest() function returns error

**Peter Niklas** · 05-05-2017, 06:04 PM

Hello,

Im trying to use the data analysis add-in to do a dummy variable regression.

Im analysing if morningstar can predict future returns. Morningstar ranks funds with 1-5 stars. More specifically I'm testing if higher rated funds outperform lower rated funds.

Y = b_0 + b_1(STAR(2&3) + b_2(STAR(4&5)) + e_t

where STAR(2&3) is a dummy variable and is equal to 1 if the fund has 2 or 3 in rating. The same principle is behind STAR(4&5).

However, when i use the add in to do the regression it gives me the error message of :

Linest() function returns error. Does any1 know why and how i can fix it?

Sorry if my question was unclear, please ask if i should clarify anything.

/Peter

**MrShorty** · 05-05-2017, 06:15 PM

I don't see enough information. What are all of the outputs of the STAR() functions? My first guess is that, somewhere in the STAR() functions (the input matrix to the LINEST() function), there is a non-numeric value. The second guess is that there is something otherwise wrong with the input matrix that is preventing the LINEST() algorithm from running or returning a result.

Linest() function returns error

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