The Prices (In $) of Rawlston, Inc Excel Was Used to Determine the Least Squares Regression Equation

question 50

Essay

The prices (in $) of Rawlston, Inc.stock (y) over a period of 12 days, the number of shares (in 100s) of company's stocks sold (x₁), and the volume of exchange (in millions) on the New York Stock Exchange (x₂) are shown below. $$\begin{array} { l l l l } \text { Day } & ( y ) & ( x 1 ) & ( x 2 ) \\1 & 87.50 & 950 & 11.00 \\2 & 86.00 & 945 & 11.25 \\3 & 84.00 & 940 & 11.75 \\4 & 83.00 & 930 & 11.75 \\5 & 84.50 & 935 & 12.00 \\6 & 84.00 & 935 & 13.00 \\7 & 82.00 & 932 & 13.25 \\8 & 80.00 & 938 & 14.50 \\9 & 78.50 & 925 & 15.00 \\10 & 79.00 & 900 & 16.50 \\11 & 77.00 & 875 & 17.00 \\12 & 77.50 & 870 & 17.50\end{array}$$
Excel was used to determine the least squares regression equation.Part of the computer output is shown below. ANOVA
$\begin{array}{llllll} & d f & \text { SS } & \text { MS } & F & \text { Significance F } \\\text { Regression }&2& 118.8474 & 59.4237 & 40.9216 & 0.0000 \\\text { Residual } &9 & 13.0692 & 1.4521 & & \\\text { Total } & 11 & 131.9167 & & &\\\\& \text { Coefficients } & \text { Standard Errort } & \text { Stat } & \text { P-value } \\\text { Intercept } & 118.5059 & 33.5753 & 3.5296 & 0.0064 \\\left(\mathrm{x}_{1}\right) & -0.0163 & 0.0315 & -0.5171 & 0.6176 \\\left(\mathrm{x}_{2}\right) & -1.5726 & 0.3590 & -4.3807 & 0.0018\end{array}$
a. $\quad$ Use the output shown above and write an equati on that can be used to predict the price of stock.
b. $\quad$ Interpret the coeff cients of the estimated regressi on equation that you found in Part a.
c. $\quad$ At a 05 level of significance, determine which variables are significant and which are no If on a given day, the number of shares of the company that were sold was 94,500 and the
d. $\quad$ of exchange on the New York Stock Exchange was 16 million, what would you expect th the stock to be?