Which Equation Represents a Complete Second-Order Model for Two Quantitative

question 4

Short Answer

Which equation represents a complete second-order model for two quantitative independent variables? A) $E ( y ) = \beta _ { 0 } + \beta _ { 1 } x _ { 1 } + \beta _ { 2 } x _ { 2 } + \beta _ { 3 } x _ { 1 } x _ { 2 } + \beta _ { 4 } x _ { 1 } ^ { 2 } + \beta _ { 5 } x _ { 2 } ^ { 2 }$
B) $E ( y ) = \beta _ { 0 } + \beta _ { 1 } x _ { 1 } + \beta _ { 2 } x _ { 2 } + \beta _ { 3 } x _ { 1 } ^ { 2 } + \beta _ { 4 } x _ { 2 } ^ { 2 }$
C) $E ( y ) = \beta _ { 0 } + \beta _ { 1 } x _ { 1 } x _ { 2 } + \beta _ { 2 } x _ { 1 } ^ { 2 } + \beta _ { 3 } x _ { 2 } ^ { 2 }$
D) $E ( y ) = \beta _ { 0 } + \beta _ { 1 } x _ { 1 } ^ { 2 } + \beta _ { 2 } x _ { 2 } ^ { 2 } + \beta _ { 3 } x _ { 1 } ^ { 2 } x _ { 2 } + \beta _ { 4 } x _ { 1 } x _ { 2 } ^ { 2 } + \beta _ { 5 } x _ { 1 } ^ { 2 } x _ { 2 } ^ { 2 }$

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Definitions:

Return On Total Assets

A financial ratio that measures how effectively a company is using its assets to generate profit, calculated as net income divided by total assets.

Return On Equity

A measure of financial performance calculated by dividing net income by shareholder's equity, indicating how well a company uses investments to generate earnings growth.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period.

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects revenue from its credit sales.