This RATS handbook accompanies the second edition of Introductory Econometrics for Finance (Cambridge University Press, ISBN: 9780521694681). The first edition of Introductory Econometrics for Finance incorporated a discussion of the use of the RATS software into the text, but the inclusion of additional material in the second edition has necessitated the switch to a separate RATS handbook to ensure that the text remains at a manageable length. It is not intended as a stand-alone textbook and it will not repeat all of the theory, background and case studies from Introductory Econometrics for Finance. Rather, it is intended to illustrate, using numerous examples with real data taken from that book, how RATS can be used to solve many problems of interest in empirical finance. The focus is on replicating the examples and not on demonstrating the full functionality of the software. Thus this handbook should be of benefit to anyone who wishes to learn how to use RATS, and it assumes no prior exposure to the software. While the illustrations here focus on topics in finance, most of the methodology is generic and hence it may be usefully employed in other areas of application such as economics, business or real estate.

As for the first edition of the main textbook, output from the RATS package is included in Courier 9-point font in a box, while instructions for readers to type, or actions that they must follow, are written in bold type.