Trying to ### Statistical Analysis in Finance#### P-Value and Significance Testing- **P-value**: 0.027 (Rounded to three decimal places as needed)#### Conclusion Based on P-Value- **Significance Level (α)**: 0.10**Options:**- A. **Reject H₀**: There is sufficient evidence to conclude that a linear relation exists between the rate of return of the index and the rate of return of the company stock.- B. **Reject H₀**: There is not sufficient evidence to conclude that a linear relation exists between the rate of return of the index and the rate of return of the company stock.- C. **Do not reject H₀**: There is not sufficient evidence to conclude that a linear relation exists between the rate of return of the index and the rate of return of the company stock.- D. **Do not reject H₀**: There is sufficient evidence to conclude that a linear relation exists between the rate of return of the index and the rate of return of the company stock.**Correct Answer**: Option A is the appropriate conclusion since the P-value (0.027) is less than the significance level (0.10).#### Confidence Interval for Slope(c) **90% Confidence Interval for the Slope of the True Least-Squares Regression Line**- **Lower Bound**: 0.2343 (Rounded to four decimal places as needed)- **Upper Bound**: 1.2901 (Rounded to four decimal places as needed)#### Mean Rate of Return Calculation(d) **Mean Rate of Return for Company Stock**- **Given**: Rate of return of the index is 3.15%- **Solution**: Calculate the mean rate of return for the company stock based on the index rate of 3.15%.**Note**: The result should be rounded to three decimal places as needed.#### Visual ElementsThere are no graphs or diagrams in the provided image. The text involves options for statistical conclusions and the calculation of confidence intervals and expected returns. # Data Analysis: Comparing Rates of ReturnThis educational content delves into the analysis of the rate of return of a company's stock over 11 months, comparing it to the rate of return of a specific index comprising 500 stocks.### Hypothesis Testing**Objective:** Determine if there is a significant linear relationship between the company's stock return and the index.- **P-value**: 0.027 (Rounded to three decimal places)### Conclusion at α = 0.10 Significance LevelChoose the correct conclusion regarding the hypothesis:A. **Reject $H_0$.** There is sufficient evidence to conclude that a linear relationship exists between the rate of return of the company stock and the index.B. Reject $H_0$. There is not sufficient evidence to conclude that a linear relationship exists.C. Do not reject $H_0$. There is not sufficient evidence to conclude that a linear relationship exists.D. Do not reject $H_0$. There is sufficient evidence to conclude that a linear relationship exists.### Confidence IntervalAssuming residuals are normally distributed, a 90% confidence interval for the intercept is:- **Lower bound**: 0.2343 (Rounded to four decimal places)- **Upper bound**: 1.2901 (Rounded to four decimal places)### Calculation of Mean Rate of Return**Objective:** Estimate the mean rate of return for the company stock when the index's rate of return is 3.1.- **Result**: (Rounded to three decimal places)### Rates of Return Data Table#### Table: Rates of Return| **Month** | **Rates of return of the index, $x$** | **Rates of return of the company stock, $y$** ||-----------|------------------------------------------|-------------------------------------------------|| Apr-18 | -1.84 | 3.28 || May-18 | 0.97 | 5.09 || Jun-18 | 1.36 | 0.54 || Jul-18 | 2.80 | 2.88 || Aug-18 | -0.57 | 2.69 || Sep-18 | 0.30 | -2.98 || Oct-18 | -1.36 | -4.83 |

Name: Trying to ### Statistical Analysis in Finance#### P-Value and Signific
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Description: Trying to ### Statistical Analysis in Finance#### P-Value and Significance Testing- **P-value**: 0.027 (Rounded to three decimal places as needed)#### Conclusion Based on P-Value- **Significance Level (α)**: 0.10**Options:**- A. **Reject H₀**: There

(c) The regression analysis is conducted using EXCEL. The software procedure is given below: Enter…

Math

Statistics

(c) Assuming the residuals are normally distributed, construct a 90% confidence interval for the slope of the true least-squares regression line. Lower bound: 0.2343 (Round to four decimal places as needed.) Upper bound: 1.2901 (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 3.15%? The mean rate of return for the company stock if the rate of return of the index is 3.15% is (Round to three decimal places as needed.) %.

(c) Assuming the residuals are normally distributed, construct a 90% confidence interval for the slope of the true least-squares regression line. Lower bound: 0.2343 (Round to four decimal places as needed.) Upper bound: 1.2901 (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 3.15%? The mean rate of return for the company stock if the rate of return of the index is 3.15% is (Round to three decimal places as needed.) %.

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

Trying to

### Statistical Analysis in Finance

#### P-Value and Significance Testing

- **P-value**: 0.027 (Rounded to three decimal places as needed)

#### Conclusion Based on P-Value

- **Significance Level (α)**: 0.10

**Options:**
- A. **Reject H₀**: There is sufficient evidence to conclude that a linear relation exists between the rate of return of the index and the rate of return of the company stock.
- B. **Reject H₀**: There is not sufficient evidence to conclude that a linear relation exists between the rate of return of the index and the rate of return of the company stock.
- C. **Do not reject H₀**: There is not sufficient evidence to conclude that a linear relation exists between the rate of return of the index and the rate of return of the company stock.
- D. **Do not reject H₀**: There is sufficient evidence to conclude that a linear relation exists between the rate of return of the index and the rate of return of the company stock.

**Correct Answer**: Option A is the appropriate conclusion since the P-value (0.027) is less than the significance level (0.10).

#### Confidence Interval for Slope

(c) **90% Confidence Interval for the Slope of the True Least-Squares Regression Line**
- **Lower Bound**: 0.2343 (Rounded to four decimal places as needed)
- **Upper Bound**: 1.2901 (Rounded to four decimal places as needed)

#### Mean Rate of Return Calculation

(d) **Mean Rate of Return for Company Stock**
- **Given**: Rate of return of the index is 3.15%

- **Solution**: Calculate the mean rate of return for the company stock based on the index rate of 3.15%.

**Note**: The result should be rounded to three decimal places as needed.

#### Visual Elements
There are no graphs or diagrams in the provided image. The text involves options for statistical conclusions and the calculation of confidence intervals and expected returns.

# Data Analysis: Comparing Rates of Return

This educational content delves into the analysis of the rate of return of a company's stock over 11 months, comparing it to the rate of return of a specific index comprising 500 stocks.

### Hypothesis Testing

**Objective:** Determine if there is a significant linear relationship between the company's stock return and the index.

- **P-value**: 0.027 (Rounded to three decimal places)

### Conclusion at α = 0.10 Significance Level

Choose the correct conclusion regarding the hypothesis:

A. **Reject $H_0$.** There is sufficient evidence to conclude that a linear relationship exists between the rate of return of the company stock and the index.

B. Reject $H_0$. There is not sufficient evidence to conclude that a linear relationship exists.

C. Do not reject $H_0$. There is not sufficient evidence to conclude that a linear relationship exists.

D. Do not reject $H_0$. There is sufficient evidence to conclude that a linear relationship exists.

### Confidence Interval

Assuming residuals are normally distributed, a 90% confidence interval for the intercept is:

- **Lower bound**: 0.2343 (Rounded to four decimal places)
- **Upper bound**: 1.2901 (Rounded to four decimal places)

### Calculation of Mean Rate of Return

**Objective:** Estimate the mean rate of return for the company stock when the index's rate of return is 3.1.

- **Result**: (Rounded to three decimal places)

### Rates of Return Data Table

#### Table: Rates of Return

| **Month** | **Rates of return of the index, $x$** | **Rates of return of the company stock, $y$** |
|-----------|------------------------------------------|-------------------------------------------------|
| Apr-18 | -1.84 | 3.28 |
| May-18 | 0.97 | 5.09 |
| Jun-18 | 1.36 | 0.54 |
| Jul-18 | 2.80 | 2.88 |
| Aug-18 | -0.57 | 2.69 |
| Sep-18 | 0.30 | -2.98 |
| Oct-18 | -1.36 | -4.83 |

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