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In 2001, the Arizona Diamondbacks defeated the New York Yankees in the Baseball World Series in 7 games. Some players, such as Bautista and Finley for the Diamondbacks, had a substantially higher batting average during the World Series than during the regular season. Others, such as Brosius and Jeter for the Yankees, did substantially poorer. You set out to investigate whether or not the regular season batting average is a good indicator for the World Series batting average. The results for 11 players who had the most at bats for the two teams are: = -0.347 + 2.290 AZSeasavg , R2=0.11, SER = 0.145, = 0.134 + 0.136 NYSeasavg , R2=0.001, SER = 0.092,
where Wsavg and Seasavg indicate the batting average during the World Series and the regular season respectively.
(a)Focusing on the coefficients first, what is your interpretation?
(b)What can you say about the explanatory power of your equation? What do you conclude from this?
Common Stock Option Warrants
Instruments that give the holder the right to purchase a company's common stock at a specified price before a certain expiry date, often attached to bonds or preferred stock.
Additional Paid-in Capital
The amount of capital from the issuance of shares that is more than the par value of the shares, reflecting the excess paid by investors above the nominal value.
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