Your Textbook Extends the Simple Regression Analysis of Chapters 4 $\widehat { \text { TestScore } } = 698.9 - 2.28 \times \text { STR }$

question 17

Essay

Your textbook extends the simple regression analysis of Chapters 4 and 5 by adding an
additional explanatory variable, the percent of English learners in school districts (PctEl).
The results are as follows: $\widehat { \text { TestScore } } = 698.9 - 2.28 \times \text { STR }$
$\text {and}$
$\widehat { \text { TestScore } } = 686.0 - 1.10 \times S T R - 0.65 \times \text { PctEL }$ Explain why you think the coefficient on the student-teacher ratio has changed so
dramatically (been more than halved).

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Definitions:

Receivable

Amounts owed to a company by its customers or debtors for goods or services delivered that have not yet been paid.

Pooling of Interests Transaction

A method used in accounting for business mergers in which the assets and liabilities of the merging companies are combined using their book values.

Book Value

The net value of a company's assets minus its liabilities, representing the equity value of the company from an accounting perspective.

Fair Value

The price at which an asset could be bought or sold or a liability settled, between knowledgeable, willing parties in an arm's length transaction.