A First-Order Model Was Used in a Regression Analysis Involving $x _ { 1 }$

question 26

Essay

A first-order model was used in a regression analysis involving 25 observations to study the relationship between a dependent variable y and three independent variables, $x _ { 1 }$ , $x _ { 2 }$ and $x _ { 3 }$ . The analysis showed that the mean squares for regression is 160 and the sum of squares for error is 1050. In addition, the following is a partial computer printout. $$\begin{array} { | c | c c | } \hline \text { Predictor } & \text { Coef } & \text { StDev } \\\hline \text { Constant } & 25 & 4 \\x _ { 1 } & 18 & 6 \\x _ { 2 } & - 12 & 4.8 \\x _ { 3 } & 6 & 5 \\\hline\end{array}$$ Is there sufficient evidence at the 5% significance level to indicate that $x _ { 2 }$ is negatively linearly related to y?

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Definitions:

Clientele Effect

A theory suggesting that certain stocks attract particular types of investors based on dividend policies or investment strategies.

Residual Dividend Policy

A policy where dividends paid to shareholders are set based on the earnings left over after all operational and expansion-related expenses are covered.

New-Stock Dividend

A new-stock dividend is a payment made by a corporation to its shareholders in the form of additional shares rather than cash.

Stock Repurchases

The act of a company buying back its own shares from the marketplace, reducing the amount of outstanding stock.