The prices of Rawlston, Inc. stock (y) over a period of 12 days, the number of s
ID: 3182380 • Letter: T
Question
The prices of Rawlston, Inc. stock (y) over a period of 12 days, the number of shares (in 100s) of company's stocks sold (x1), and the volume of exchange (in millions) on the New York Stock Exchange (x2) are shown below.
Excel was used to determine the least-squares regression equation. Part of the computer output is shown below.
1.) If in a given day, the number of shares of the company that were sold was 94,500 and the volume of exchange on the New York Stock Exchange was 16 million, what would you expect the price of the stock to be?
2.) Determine the prediction equation from this output.
3.) Interpret the coefficient for number of shares (x1).
For every additional number of share of stock purchased, the price of Rawlston, Inc stock increases by $0.16, holding volume of exchange on the NYSE constant.
For every additional number of share of stock purchased, the price of Rawlston, Inc stock decreases by $1.57, holding volume of exchange on the NYSE constant.
For every additional number of share of stock purchased, the price of Rawlston, Inc stock decreases by $0.16, holding volume of exchange on the NYSE constant.
For every additional number of share of stock purchased, the price of Rawlston, Inc stock increases by $1.57, holding number of shares constant.
Day Y X1 X2 1 87.50 950 11.00 2 86.00 945 11.25 3 84.00 940 11.75 4 83.00 930 11.75 5 84.50 935 12.00 6 84.00 935 13.00 7 82.00 932 13.25 8 80.00 938 14.50 9 78.50 925 15.00 10 79.00 900 16.50 11 77.00 875 17.00 12 77.50 870 17.50Explanation / Answer
1) expected price =118.5059+945*(-0.0163)+16*(-1.5726)=77.9408
2) predicted line equation =118.5059--0.0163*x1-1.5726*x2
3)
For every additional number of share of stock purchased, the price of Rawlston, Inc stock increases by $0.16, holding volume of exchange on the NYSE constant.
A.For every additional number of share of stock purchased, the price of Rawlston, Inc stock increases by $0.16, holding volume of exchange on the NYSE constant.
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