A computer analysis reveals that the best-fitting trend model is y_t = 4.12e^0.987^t. The trend was fitted using year-end common stock prices for Melodic Kortholt Outlet for the last six years. The R² is 0.8571. Which conclusion is not supportable? A)The absolute annual growth (in dollars per share) is increasing. B)Few investments could match the astounding growth rate. C)At the end of year 3 the stock price would be nearly $80. D)The exponential model is inappropriate for financial data.

Question

Quizplus · Accepted Answer

The statement provides evidence that the exponential model is appropriate for the financial data since the best-fitting trend model is an exponential function. Therefore, choice D is not supportable. Choices A through C are all supportable based on the information provided.

A Computer Analysis Reveals That the Best-Fitting Trend Model Is