Below You Are Given a Partial Multiple Regression Computer Output

question 31

Essay

Below you are given a partial multiple regression computer output based on a sample of 30 days of the price of a company's stock (y in dollars), the Dow Jones Industrial Average (x₁), and the stock price of the company's major competitor (x₂ in dollars). $\begin{array}{lll} & \text { Coefficients } & \text { Standard Error } \\\text { Constant } & 20.000 & 5.455 \\\mathrm{x}_{1} & 0.006 & 0.002 \\\mathrm{x}_{2} & -0.70 & 0.200\end{array}$ ​
a.
Use the output shown above and write an equation that can be used to predict the price of the stock.
b.
If the Dow Jones Industrial Average is 10,000 and the price of the major competitor is $50, what would you expect the price of the stock to be?
c.
At α = .05, test to determine if the Dow Jones average is a significant variable.
d.
At α = .05, test to determine if the stock price of the major competitor is a significant variable.

---

Definitions:

Payoff

The return or final outcome received from an investment, which could be positive or negative.

Maturity Date

The date on which a debt obligation must be repaid in full, including any principal and accrued interest.

Troy Ounce

A Troy ounce is a unit of imperial measure used primarily in the precious metals industry, equating to approximately 31.1035 grams.

July Futures Contract

A standard legal agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in July.