EP BUSINESS STATISTICS:FIRST COURSE-ACC
8th Edition
ISBN: 9780135179802
Author: Levine
Publisher: PEARSON CO
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Use the Financial database from “Excel Databases.xls” on Blackboard. Use Total Revenues, Total Assets, Return on Equity, Earnings Per Share, Average Yield, and Dividends Per Share to predict the average P/E ratio for a company. Use Excel to develop the multiple linear regression model. Assume a 5% level of significance.
Which independent variable is the strongest predictor of the average P/E ratio of a company?
A. Total Revenues
B. Average Yield
C. Earnings Per Share
D.Return on Equity
E. Total Assets
F.Dividends Per Share
Company
Type
Total Revenues
Total Assets
Return on Equity
Earnings per Share
Average Yield
Dividends per Share
Average P/E Ratio
AFLAC
6
7251
29454
17.1
2.08
0.9
0.22
11.5
Albertson's
4
14690
5219
21.4
2.08
1.6
0.63
19
Allstate
6
20106
80918
20.1
3.56
1
0.36
10.6
Amerada Hess
7
8340
7935
0.2
0.08
1.1
0.6
698.3
American General
6
3362
80620
7.1
2.19
3
1.4
21.2
American Stores
4
19139
8536
12.2
1.01
1.4
0.34
23.5
Amoco
7
36287…
According to human capital theory, a person’s earning is linked to her level of education – there is a relationship between workers income and years of education. Using data from the Labour Force Survey, a researcher found the following regression results for earnings on intercept, years of education, experience, and experience squared:
Earnings = 5.24 + 0.035 educ + 0.165 exper – 0.003 exper2
(2.45) (0.012) (0.031) (0.001)
Construct a 95% confidence interval for the effect of years of education on earnings ?
2. Consider an individual with 8 years of experience. What would you expect to be the return to two (2) additional years of experience (the effect on earnings)?
3. According to economic theory,…
Why the regression line is a straight line rather than a curved line?
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- Does Table 1 represent a linear function? If so, finda linear equation that models the data.arrow_forwardFind the equation of the regression line for the following data set. x 1 2 3 y 0 3 4arrow_forwardWhat does the y -intercept on the graph of a logistic equation correspond to for a population modeled by that equation?arrow_forward
- Olympic Pole Vault The graph in Figure 7 indicates that in recent years the winning Olympic men’s pole vault height has fallen below the value predicted by the regression line in Example 2. This might have occurred because when the pole vault was a new event there was much room for improvement in vaulters’ performances, whereas now even the best training can produce only incremental advances. Let’s see whether concentrating on more recent results gives a better predictor of future records. (a) Use the data in Table 2 (page 176) to complete the table of winning pole vault heights shown in the margin. (Note that we are using x=0 to correspond to the year 1972, where this restricted data set begins.) (b) Find the regression line for the data in part ‚(a). (c) Plot the data and the regression line on the same axes. Does the regression line seem to provide a good model for the data? (d) What does the regression line predict as the winning pole vault height for the 2012 Olympics? Compare this predicted value to the actual 2012 winning height of 5.97 m, as described on page 177. Has this new regression line provided a better prediction than the line in Example 2?arrow_forwardFind the mean hourly cost when the cell phone described above is used for 240 minutes.arrow_forwardBriefly describe what is meant by the problem of errors in measurement of the predictor variables and describe its effect on a regression analysis.arrow_forward
- Professional basketball has truly become a sport that generates interest among fans around the world. More and more players come from outside the United States to play in the National Basketball Association (NBA). You want to develop a regression model to predict the number of wins achieved by each NBA team, based on field goal (shots made) percentage and three-point field goal percentage. The data are stored in NBA.xlsx . TEAM Wins Field Goal % Three-Point Field Goal % Points Per Game Rebound Freedraw Turnover Houston Rockets 65 46 36.2 112.4 43.5 19.6 13.8 Toronto Raptors 59 47.2 35.8 111.7 44 17.3 13.4 Golden State Warriors 58 50.3 39.1 113.5 43.5 16.6 15.4 Boston Celtics 55 45 37.7 104 44.5 16 14 Philadelphia 76ers 52 47.2 36.9 109.8 47.4 17.1 16.5 Cleveland Cavaliers 50 47.6 37.2 110.9 42.1 18.1 13.7 Portland Trail Blazers 49 45.2 36.6 105.6 45.5 16.7 13.5 Indiana Pacers 48 47.2 36.9 105.6 42.3 14.9 13.3 New Orleans Pelicans 48 48.3 36.2 111.7 44.3 16.1 14.9…arrow_forwardProfessional basketball has truly become a sport that generates interest among fans around the world. More and more players come from outside the United States to play in the National Basketball Association (NBA). You want to develop a regression model to predict the number of wins achieved by each NBA team, based on field goal (shots made) percentage and three-point field goal percentage. The data are stored in NBA.xlsx . TEAM Wins Field Goal % Three-Point Field Goal % Points Per Game Rebound Freedraw Turnover Houston Rockets 65 46 36.2 112.4 43.5 19.6 13.8 Toronto Raptors 59 47.2 35.8 111.7 44 17.3 13.4 Golden State Warriors 58 50.3 39.1 113.5 43.5 16.6 15.4 Boston Celtics 55 45 37.7 104 44.5 16 14 Philadelphia 76ers 52 47.2 36.9 109.8 47.4 17.1 16.5 Cleveland Cavaliers 50 47.6 37.2 110.9 42.1 18.1 13.7 Portland Trail Blazers 49 45.2 36.6 105.6 45.5 16.7 13.5 Indiana Pacers 48 47.2 36.9 105.6 42.3 14.9 13.3 New Orleans Pelicans 48 48.3 36.2 111.7 44.3 16.1 14.9…arrow_forward
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