Data Table The accompanying data represent the annual rates of return of two com
ID: 3376171 • Letter: D
Question
Data Table The accompanying data represent the annual rates of return of two companies' stock for the past 12 years. Complete parts (a) through (i). EEB Click the icon to view the data table. (b) Determine the correlation coefficient between rate of return of Company 1 and Company 2. The correlation coefficient is 0.946 Round to three decimal places as needed.) (c) Based on the scatter diagram and correlation coefficient is there a linear relation between rate of return of Company 1 and Company 2? Year Rate of Return of Company1 Rate of Return of Company 2 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 0.203 0.310 0.267 0.195 -0.101 -0.130 -0.234 0.264 0.090 0.030 0.128 -0.035 0.402 0.510 0.410 0.536 -0.060 -0.151 -0.377 0.328 0.207 -0.014 0.093 0.027 Yes No (d) Find the least-squares regression line treating the rate of return of Company 1 as the explanatory variable. Choose the correct answer below 1.5314x+0.0333 0.0333x + 1.5314 y y1.534+0.0333 y1.5314x-0.0333 (e) Predict the rate of return of Company 2 if the rate of return of Company 1 is 0.15 (15%). The rate of returm of Company 2 will be (Round to four decimal places as needed.)Explanation / Answer
e) Rate of return of Company 2 using company 1
y = 1.5314*0.15+0.03333
y = 0.2630
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