The last five exercises of this chapter employ slightly more sophisticated econometric techniques; therefore you might want to return to these exercises later after becoming more familiar with the requisite econometric tools.In particular, in exercise 6 you test for the stability of B using the Chow test procedure. In Exercise 7 you employ dummy variables in "event studies" for the Three Mile Island nuclear power accident and for the bidding war between DuPont and Dow Chemical in their takeover attempt of Conoco. In Exercise 8 you employ Chow tests and dummy variables to assess whether January returns are different from those of other months,as has apparently been observed. Then in Exercise 9 you assess an alternative to the CAPM framework, the arbitrage pricing model, by comparing results from multivariate and bivariate regressions. In the final application, Exercise 10, you conduct a number of tests to determine the empirical validity of the stochastic specification.