The data in the accompanying table represent the rate of return of a certain com

Question

The data in the accompanying table represent the rate of return of a certain company stock for 11 months, compared with the rate of return of a certain index of 500 stocks. Both are in percent.

(C) Assuming the residuals are normally distributed, construct a 90% confidence interval for the slope of the true least-squares regression line.

Lower bound: nothing (Round to four decimal places as needed.)

Upper bound: nothing (Round to four decimal places as needed.)

(D) What is the mean rate of return for the company stock if the rate of return of the index is 3.25%?

The mean rate of return for the company stock if the rate of return of the index is 3.25% is____%?

(D) What is the mean rate of return for the company stock if the rate of return of the index is 3.15%?

The mean rate of return for the company stock if the rate of return of the index is 3.15% is____%?

Rate of Return Month Rates of return of the index, x Rates of return of the company stock, y Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sept-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 4.33 3.35 - 1.78 -3.20 1.29 3.58 1.48 - 4.40 -0.86 3.38 5.09 0.54 2.88 2.69 7.41 - 4.83 2.38 2.37 -6.12 - 3.48 -4.27 3.77 Print Done

Explanation / Answer

Here we can use excel to get all the answers. First we copy the data in excel. We go to Data tab there we select Data Analysis. In Data Analysis we find the Regression. We click there and then we select the data for Y and X. Finally we click OK and get the required output as below.

x

y

4.33

3.38

3.35

5.09

-1.78

0.54

-3.2

2.88

1.29

2.69

3.58

7.41

1.48

-4.83

-4.4

-2.38

-0.86

2.37

-6.12

-4.27

-3.48

-3.77

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.6649

R Square

0.4420

Adjusted R Square

0.3800

Standard Error

3.2232

Observations

11

ANOVA

df

SS

MS

F

Significance F

Regression

1

74.07419455

74.074195

7.130154

0.025612599

Residual

9

93.49976909

10.388863

Total

10

167.5739636

Coefficients

Standard Error

t Stat

P-value

Lower 90.0%

Upper 90.0%

Intercept

1.2321

0.983527657

1.2527612

0.2418634

-0.5708

3.0350

X Variable 1

0.7648

0.286409654

2.6702348

0.0256126

0.2398

1.2898

Question C)

Answer:

Lower Bound: 0.2398

Upper Bound: 1.2898

Question D)

y^ = 1.2321 + 0.7648x

x = 3.25

y^ = 1.2321 + (0.7648*3.25)

     = 3.72

Answer: 3.72%

Question D.)

y^ = 1.2321 + 0.7648x

x = 3.25

y^ = 1.2321 + (0.7648*3.15)

     = 3.64

Answer: 3.64%

x

y

4.33

3.38

3.35

5.09

-1.78

0.54

-3.2

2.88

1.29

2.69

3.58

7.41

1.48

-4.83

-4.4

-2.38

-0.86

2.37

-6.12

-4.27

-3.48

-3.77

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.