Statistics for Business & Economics, Revised (MindTap Course List)
12th Edition
ISBN: 9781285846323
Author: David R. Anderson, Dennis J. Sweeney, Thomas A. Williams, Jeffrey D. Camm, James J. Cochran
Publisher: South-Western College Pub
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Textbook Question
Chapter 14, Problem 59SE
The following data show Morningstar’s Fair Value estimate and the Share Price for 28 companies. Fair Value is an estimate of a company’s value per share that takes into account estimates of the company’s growth, profitability, riskiness, and other factors over the next five years (Morningstar Stocks 500, 2008 edition).
| Company | Fair Value ($) | Share Price ($) |
| Air Products and Chemicals | 80 | 98.63 |
| Allied Waste Industries | 17 | 11.02 |
| America Mobile | 83 | 61.39 |
| AT&T | 35 | 41.56 |
| Bank of America | 70 | 41.26 |
| Barclays PLC | 68 | 40.37 |
| Citigroup | 53 | 29.44 |
| Costco Wholesale Corp. | 75 | 69.76 |
| Covidien, Ltd. | 58 | 44.29 |
| Darden Restaurants | 52 | 27.71 |
| Dun & Bradstreet | 87 | 88.63 |
| Equifax | 42 | 36.36 |
| Gannett Co. | 38 | 39.00 |
| Genuine Parts | 48 | 46.30 |
| GlaxoSmithKline PLC | 57 | 50.39 |
| Iron Mountain | 33 | 37.02 |
| ITT Corporation | 83 | 66.04 |
| Johnson & Johnson | 80 | 66.70 |
| Las Vegas Sands | 98 | 103.05 |
| Macrovision | 23 | 18.33 |
| Marriott International | 39 | 34.18 |
| Nalco Holding Company | 29 | 24.18 |
| National Interstate | 25 | 33.10 |
| Portugal Telecom | 15 | 13.02 |
| Qualcomm | 48 | 39.35 |
| Royal Dutch Shell Ltd. | 87 | 84.20 |
| SanDisk | 60 | 33.17 |
| Time Warner | 42 | 27.60 |
- a. Develop the estimated regression equation that could be used to estimate the share price given the fair value.
- b. At the .05 level of significance, is there a significant relationship between the two variables?
- c. Use the estimated regression equation to predict the share price for a company that has a fair value of $50.
- d. Do you believe the estimated regression equation would provide a good prediction of the share price? Use r2 to support your answer.
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Chapter 14 Solutions
Statistics for Business & Economics, Revised (MindTap Course List)
Ch. 14.2 - Given are five observations for two variables, x...Ch. 14.2 - Given are five observations for two variables, x...Ch. 14.2 - Given are five observations collected in a...Ch. 14.2 - The following data give the percentage of women...Ch. 14.2 - Elliptical trainers are becoming one of the more...Ch. 14.2 - The National Football League (NFL) records a...Ch. 14.2 - A sales manager collected the following data on...Ch. 14.2 - The American Association of Individual Investors...Ch. 14.2 - Using a global-positioning-system (GPS)-based...Ch. 14.2 - On March 31, 2009, Ford Motor Companys shares were...
Ch. 14.2 - Sporty cars are designed to provide better...Ch. 14.2 - Concur Technologies, Inc., is a large...Ch. 14.2 - To the Internal Revenue Service, the...Ch. 14.2 - PCWorld rated four component characteristics for...Ch. 14.3 - The data from exercise 1 follow. xi 1 2 3 4 5 yi 3...Ch. 14.3 - The data from exercise 2 follow. xi 3 12 6 20 14...Ch. 14.3 - The data from exercise 3 follow. xi 2 6 9 13 20 yi...Ch. 14.3 - The following data show the brand, price (), and...Ch. 14.3 - In exercise 7 a sales manager collected the...Ch. 14.3 - Bicycling, the worlds leading cycling magazine,...Ch. 14.3 - An important application of regression analysis in...Ch. 14.3 - Refer to exercise 5 where the following data were...Ch. 14.5 - The data from exercise 1 follow. xi 1 2 3 4 5 yi 3...Ch. 14.5 - The data from exercise 2 follow. xi 3 12 6 20 14...Ch. 14.5 - The data from exercise 3 follow. xi 2 6 9 13 20 yi...Ch. 14.5 - In exercise 18 the data on price () and the...Ch. 14.5 - The number of megapixels in a digital camera is...Ch. 14.5 - In exercise 8 ratings data on x = the quality of...Ch. 14.5 - Refer to exercise 21, where data on production...Ch. 14.5 - Prob. 30ECh. 14.5 - In exercise 20, data on x = weight (pounds) and y...Ch. 14.6 - The data from exercise 1 follow. xi 1 2 3 4 5 yi 3...Ch. 14.6 - The data from exercise 2 follow. xi 3 12 6 20 14...Ch. 14.6 - The data from exercise 3 follow. xi 2 6 9 13 20 yi...Ch. 14.6 - The following data are the monthly salaries y and...Ch. 14.6 - In exercise 7, the data on y = annual sales (...Ch. 14.6 - In exercise 13, data were given on the adjusted...Ch. 14.6 - Refer to exercise 21, where data on the production...Ch. 14.6 - Almost all U.S. light-rail systems use electric...Ch. 14.7 - The commercial division of a real estate firm is...Ch. 14.7 - Following is a portion of the computer output for...Ch. 14.7 - A regression model relating x, number of...Ch. 14.7 - Out-of-state tuition and fees at the top graduate...Ch. 14.7 - Automobile racing, high-performance driving...Ch. 14.8 - Given are data for two variables, x and y. xi 6 11...Ch. 14.8 - The following data were used in a regression...Ch. 14.8 - Data on advertising expenditures and revenue (in...Ch. 14.8 - Refer to exercise 7, where an estimated regression...Ch. 14.8 - Recent family home sales in San Antonio provided...Ch. 14.9 - Consider the following data for two variables, x...Ch. 14.9 - Consider the following data for two variables, x...Ch. 14.9 - Charity Navigator is Americas leading independent...Ch. 14.9 - Many countries, especially those in Europe, have...Ch. 14.9 - Prob. 54ECh. 14 - Does a high value of r2 imply that two variables...Ch. 14 - In your own words, explain the difference between...Ch. 14 - What is the purpose of testing whether 1 = 0? If...Ch. 14 - The Dow Jones Industrial Average (DJIA) and the...Ch. 14 - The following data show Morningstars Fair Value...Ch. 14 - One of the biggest changes in higher education in...Ch. 14 - Jensen Tire Auto is in the process of deciding...Ch. 14 - In a manufacturing process the assembly line speed...Ch. 14 - A sociologist was hired by a large city hospital...Ch. 14 - The regional transit authority for a major...Ch. 14 - A marketing professor at Givens College is...Ch. 14 - The Transactional Records Access Clearinghouse at...Ch. 14 - The Toyota Camry is one of the best-selling cars...Ch. 14 - You have been assigned to analyze the risk...Ch. 14 - As part of a study on transportation safety, the...Ch. 14 - Consumer Reports tested 166 different...Ch. 14 - Finding the Best Car Value When trying to decide...
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