Help with Probit

[joust41]

Hi!

I have a set with some simple financial data and need to run a Probit regression. The set contains monthly returns on a traded security, and a monthly market stress index.The task introduces 2 investment scenarios - one where you invest in the security regardless of market stress, and another where investment is not made when the stress index rises above the Normal times value(is provided and is a constant). The D variable is my dummy variable, at least as far as I understand and its value is either 1 for invest or 0 for don't. I need to simulate the returns on the two scenarios but I'm unsure how to do that. I've familiarised myself with regressions somewhat but apparently not enough

[dflak]

I've managed to balance my checkbook successfully for the past 18 months. That's as close to high finance as I can get. It would probably help if you can point us neophytes to a "Probit Regression for Dummies" tutorial or perhaps explain it in layman's terms. Equally as helpful would be to attach a sample workbook without sensitive data and, if possible manually compute and provide some results so we know if we got the right answer.

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