Identify the Components of Simple Linear Regression Models and Discuss

question 14

Multiple Choice

Identify the components of simple linear regression models and discuss their applications
The following table exhibits the age of antique furniture and the corresponding prices. Use the table to answer the following question(s) . (Hint: Use scatter diagram and the Excel Trendline tool where necessary) . $$\begin{array} { | l | l | } \hline \begin{array} { l } \text { Number } \\\text { of years }\end{array} & \begin{array} { l } \text { Value } \\\text { (\$) }\end{array} \\\hline 78 & 930 \\\hline 91 & 1010 \\\hline 83 & 970 \\\hline 159 & 1950 \\\hline 134 & 1610 \\\hline 210 & 2880 \\\hline 88 & 980 \\\hline 178 & 2010 \\\hline 124 & 1370 \\\hline 72 & 900 \\\hline\end{array}$$
-Which of the following is true of linear functions used in predictive analytical models?

• A) It is used when the rate of change in a variable decreases or increases quickly and then levels out.
• B) It is used when there is a steady decrease or increase over a range of a variable.
• C) It is used when there is increase at a specific rate.
• D) It is used when there is a rise or fall at a constantly increasing rate.

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Definitions:

Retained Earnings

Retained earnings refer to the portion of net income left over after dividends are paid out to shareholders, which is reinvested into the company.

Retroactive Restatement

Adjusting previously reported financial statements to reflect better understanding or corrections of past errors.

Dividend Yield

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

Common Stock

Represents ownership shares in a corporation, giving holders a claim on part of the company’s assets and earnings.