Based on the Regression Output and Residual Plot Below, Which

question 18

Multiple Choice

Based on the regression output and residual plot below, which of the following is true?
Regression Analysis: Technology Adoption versus Time
Technology Adoption = - 11.9 +
3) 37 Time
S = 6.30783 R-Sq = 82.5%
The regression equation is: Durbin-Watson statistic = 0.278634

• A) The linear model explains 82.5 % of the variability in technology adoption.
• B) The linear model is appropriate.
• C) The linear model is not appropriate.
• D) Both A and B.
• E) Both A and C.

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Definitions:

Marginal Shareholder

An investor perceived to be influential in determining a stock's price by their decisions to buy or sell at the margin.

Common Stock

Shares of ownership in a corporation, giving holders voting rights and a dividend based on the company’s profitability.

Cost of Debt

The interest rate a company pays on its borrowings, often expressed as a percentage.

Cost of Equity

The return a firm theoretically pays to its equity investors, i.e., shareholders, to compensate for the risk they undertake by investing their capital.