Data Were Collected on Monthly Sales Revenues (In $1,000s) and Monthly

question 48

Multiple Choice

Data were collected on monthly sales revenues (in $1,000s) and monthly advertising expenditures ($100s) for a sample of drug stores. The regression line relating revenues
(Y) to advertising expenditure (X) is estimated to be yˆ = −48.3 + 9.00x . The correct
Interpretation of the slope is that for each additional

• A) $1 spent on advertising, predicted sales revenue increases by $9,000.
• B) $100 spent on advertising, predicted sales revenue increases by $9,000.
• C) $100 spent on advertising, predicted sales revenue decreases by $9,000.
• D) $1,000 in sales revenue, advertising expenditures decrease by $48.30.
• E) $100 in sales revenue, advertising expenditures decrease by $48.30.

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Definitions:

Expected Return

The anticipated profit or loss from an investment over a specified period, factoring in all possible scenarios.

Expected Dividend Yield

An estimation of the dividend earnings on a stock investment, expressed as a percentage of the stock price.

Expected Dividend

The forecasted amount of dividend payments that an investor anticipates receiving from investments in stocks.

Tracking Stock

A type of stock issued by a parent company that tracks the financial performance of a particular division or subsidiary without conferring ownership.