Suppose you work for a software company and you would like to estimate the market value of your company. You hypothesize that the market value of a software company (response variable) is a linear function of its earnings (explanatory variable). To test this, you collect data on the earnings and market value of 4 companies in your industry. This results in the following data: Company earnings ($mm) market cap ($mm) Unicorn 12 70 Bolt 2 24 PsiCo 100 700 Big 50 450 You fit a linear regression to these data. The company you work for (BizStatCo) has earnings of $50 million. What is the model's estimate of the market cap for BizStatCo (i.e., what is the y^)?
Suppose you work for a software company and you would like to estimate the market value of your company. You hypothesize that the market value of a software company (response variable) is a linear function of its earnings (explanatory variable). To test this, you collect data on the earnings and market value of 4 companies in your industry. This results in the following data: Company earnings ($mm) market cap ($mm) Unicorn 12 70 Bolt 2 24 PsiCo 100 700 Big 50 450 You fit a linear regression to these data. The company you work for (BizStatCo) has earnings of $50 million. What is the model's estimate of the market cap for BizStatCo (i.e., what is the y^)?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
Question
Suppose you work for a software company and you would like to estimate the market value of your company. You hypothesize that the market value of a software company (response variable) is a linear
Company | earnings ($mm) | market cap ($mm) |
Unicorn | 12 | 70 |
Bolt | 2 | 24 |
PsiCo | 100 | 700 |
Big | 50 | 450 |
You fit a linear regression to these data. The company you work for (BizStatCo) has earnings of $50 million. What is the model's estimate of the market cap for BizStatCo (i.e., what is the y^)?
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images

Recommended textbooks for you

MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc

Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning

Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning

MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc

Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning

Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning

Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON

The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman

Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman