EBK STATISTICAL TECHNIQUES IN BUSINESS
17th Edition
ISBN: 9781259924163
Author: Lind
Publisher: MCGRAW HILL BOOK COMPANY
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Textbook Question
Chapter 14, Problem 27CE
An investment advisor is studying the relationship between a common stock’s price to earnings (P/E) ratio and factors that she thinks would influence it. She has the following data on the earnings per share (EPS) and the dividend percentage (Yield) for a sample of 20 stocks.
- a. Develop a multiple linear regression with P/E as the dependent variable.
- b. Are either of the two independent variables an effective predictor of P/E?
- c. Interpret the regression coefficients.
- d. Do any of these stocks look particularly undervalued?
- e. Plot the residuals and check the normality assumption. Plot the fitted values against the residuals.
- f. Does there appear to be any problems with homoscedasticity?
- g. Develop a correlation matrix. Do any of the
correlations indicate multicollinearity?
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Chapter 14 Solutions
EBK STATISTICAL TECHNIQUES IN BUSINESS
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