All of a sudden, your research assistant comes running in and says that one respondent belatedly sent in his response. His response for x, coincidentally happens to be 80, the same as the mean or average of the x values used in the regression already computed regression but his response for y is twice the average or mean of the y values used in the regression. Would the slope change if this additional data point were to be included? Explain why or why not. (Prove if possible.) The following is a regression of the logarithm of salaries of CEOS (Isalary) on the return on equity (roe) and the logarithm of sales (Isales) of their respective companies and on an indicator or dummy variable finance (finance = 1 if the company is in the finance sector and = 0 otherwise):

MATLAB: An Introduction with Applications
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Author:Amos Gilat
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All of a sudden, your research assistant comes running in and says that one respondent belatedly sent in
his response. His response for x, coincidentally happens to be 80, the same as the mean or average of
the x values used in the regression already computed regression but his response for y is twice the
average or mean of the y values used in the regression. Would the slope change if this additional data
point were to be included? Explain why or why not. (Prove if possible.)
The following is a regression of the logarithm of salaries of CEOS (Isalary) on the return on equity (roe)
and the logarithm of sales (Isales) of their respective companies and on an indicator or dummy variable
finance (finance =1 if the company is in the finance sector and = 0 otherwise):
Isalary = 4.306 + 0.019 roe + 0.274 Isales +0.183 finance
R = 0.30
number of observations = 209
Transcribed Image Text:All of a sudden, your research assistant comes running in and says that one respondent belatedly sent in his response. His response for x, coincidentally happens to be 80, the same as the mean or average of the x values used in the regression already computed regression but his response for y is twice the average or mean of the y values used in the regression. Would the slope change if this additional data point were to be included? Explain why or why not. (Prove if possible.) The following is a regression of the logarithm of salaries of CEOS (Isalary) on the return on equity (roe) and the logarithm of sales (Isales) of their respective companies and on an indicator or dummy variable finance (finance =1 if the company is in the finance sector and = 0 otherwise): Isalary = 4.306 + 0.019 roe + 0.274 Isales +0.183 finance R = 0.30 number of observations = 209
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