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The Prices (In $) of Rawlston, Inc Excel Was Used to Determine the Least Squares Regression Equation

Question 86

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The prices (in $) 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.  Day (y)(x1)(x2)187.5095011.00286.0094511.25384.0094011.75483.0093011.75584.5093512.00684.0093513.00782.0093213.25880.0093814.50978.5092515.001079.0090016.501177.0087517.001277.5087017.50\begin{array} { l l l l } \text { Day } & ( y ) & ( x 1 ) & ( x 2 ) \\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 & 17.50\end{array}
Excel was used to determine the least squares regression equation.Part of the computer output is shown below. ANOVA
df SS  MS F Significance F  Regression 2118.847459.423740.92160.0000 Residual 913.06921.4521 Total 11131.9167 Coefficients  Standard Errort  Stat  P-value  Intercept 118.505933.57533.52960.0064(x1)0.01630.03150.51710.6176(x2)1.57260.35904.38070.0018\begin{array}{llllll} & d f & \text { SS } & \text { MS } & F & \text { Significance F } \\\text { Regression }&2& 118.8474 & 59.4237 & 40.9216 & 0.0000 \\\text { Residual } &9 & 13.0692 & 1.4521 & & \\\text { Total } & 11 & 131.9167 & & &\\\\& \text { Coefficients } & \text { Standard Errort } & \text { Stat } & \text { P-value } \\\text { Intercept } & 118.5059 & 33.5753 & 3.5296 & 0.0064 \\\left(\mathrm{x}_{1}\right) & -0.0163 & 0.0315 & -0.5171 & 0.6176 \\\left(\mathrm{x}_{2}\right) & -1.5726 & 0.3590 & -4.3807 & 0.0018\end{array}
a. \quad Use the output shown above and write an equati on that can be used to predict the price of stock.
b. \quad Interpret the coeff cients of the estimated regressi on equation that you found in Part a.
c. \quad At a 05 level of significance, determine which variables are significant and which are no If on a given day, the number of shares of the company that were sold was 94,500 and the
d. \quad of exchange on the New York Stock Exchange was 16 million, what would you expect th the stock to be?

Correct Answer:

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a. blured image = 118.5059 - .0163x1 - 1.5726x2
b.
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