Identify the Components of Simple Linear Regression Models and Discuss

question 21

Multiple Choice

Identify the components of simple linear regression models and discuss their applications Use the data given below to answer the following question(s) .
The worldwide sales of cars from 1981-1990 are shown in the table below. Given: α = 0.2 and β
= 0.15 (Hint: Use XLMiner) $$\begin{array} { | c | c | } \hline \text { Year } & \begin{array} { c } \text { Units sold in } \\\text { thousands }\end{array} \\\hline 1981 & 888 \\\hline 1982 & 900 \\\hline 1983 & 1000 \\\hline 1984 & 1200 \\\hline 1985 & 1100 \\\hline 1986 & 1300 \\\hline 1987 & 1250 \\\hline 1988 & 1150 \\\hline 1989 & 1100 \\\hline 1990 & 1200 \\\hline\end{array}$$
-Which of the following equations is the trend line equation for the given data? (Note: the fitted model assumes that the years are numbered 1 through 10, not the actual dates.)

• A) 60.123x + 481.56
• B) 48.16x + 481.86
• C) 32.17x + 931.87
• D) 57.15x + 503.81

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Definitions:

Interest Rates

The cost of borrowing money or the return on investments, usually expressed as a percentage of the principal amount per annum.

Callable Bond

A type of bond that gives the issuer the right to repay the bond before its maturity date, typically at a predefined call price.

Yield to Call

The interest rate that an investor would receive if they held a callable bond until the call date.

Quoted Coupon Rate

This is the annual interest rate paid by a bond, expressed as a percentage of the bond’s face value and fixed for the bond's lifespan.