Find the Equation of the Regression Line for the Given

question 36

Multiple Choice

Find the equation of the regression line for the given data. $$\begin{array} { l | c | c | c | c | c | c | c | c | c | c } \mathrm { x } & - 5 & - 3 & 4 & 1 & - 1 & - 2 & 0 & 2 & 3 & - 4 \\\hline \mathrm { y } & 11 & - 6 & 8 & - 3 & - 2 & 1 & 5 & - 5 & 6 & 7\end{array}$$

• A) \(\hat{\mathrm { y }}\) = -0.206x + 2.097
• B) \(\hat { y }\) = 2.097x - 0.206
• C) \(\hat { \mathrm { y } }\) = 0.206x - 2.097
• D) \(\hat { \mathrm { y } }\) = -2.097x + 0.206

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Definitions:

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points, indicating the degree to which individual data points differ from the mean.

Beta

An indicator of a stock's fluctuation in comparison to the general market, denoting its relative risk to the average market movement.

Diversification

A risk management strategy that involves spreading investments across various financial instruments, industries, or other categories to reduce exposure to any single asset or risk.

Risk-Averse Investors

Investors who prioritize minimizing risk over maximizing returns, often choosing safer, lower-yield investments.