if ros increases by 5
Chapter6: Exponential And Logarithmic Functions
Section: Chapter Questions
Problem 33PT: Enter the data from Table 2 into a graphing calculator and graph the ranking scatter plot. Determine...
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By what percentage is salary predicted to increase if ros increases by 50 points? Does ros have a practically large effect on salary?
![Consider an equation to explain salaries of CEOs in terms of annual firm sales, return on equity (roe,
in percentage form), and return on the firm's stock (ros, in percentage form):
log(salary) = Po + P₁ log(sales) + B₂roe + B3ros + μ
Using the data in CEOSAL1, the following equation was obtained by OLS:
log(salary) = 4.32 +0.28 log(sales) + 0.0174roe + 0.00024ros
(0.0041) (0.00054)
(0.32) (0.035)
n = 209, R² = 0.283](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe4308051-3fa8-43dc-a7a9-052a1b27bb47%2Fad74711b-d833-4720-a881-1fe24e0cf8b5%2F9uachcf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Consider an equation to explain salaries of CEOs in terms of annual firm sales, return on equity (roe,
in percentage form), and return on the firm's stock (ros, in percentage form):
log(salary) = Po + P₁ log(sales) + B₂roe + B3ros + μ
Using the data in CEOSAL1, the following equation was obtained by OLS:
log(salary) = 4.32 +0.28 log(sales) + 0.0174roe + 0.00024ros
(0.0041) (0.00054)
(0.32) (0.035)
n = 209, R² = 0.283
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