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A Regression Model Relating a Dependent Variable, Y, with One α\alpha

question 42

Essay

A regression model relating a dependent variable, Y, with one independent variable, X1, resulted in an SSE of 400. Another regression model with the same dependent variable, Y, and two independent variables, X1 and X2, resulted in an SSE of 320. At α\alpha = .05, determine if X2 contributed significantly to the model. The sample size for both models was 20.

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Definitions:

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price.

Return on Assets

A financial ratio that measures the efficiency of a company in generating profit from its assets.

Basic Earnings Per Share

A financial metric that calculates the amount of net income earned per share of stock outstanding.

Common Dividends

Dividends that are paid out to holders of common shares from a company's earnings, often fluctuating with the company's profitability.

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