Exhibit 15-6 Below You Are Given a Partial Excel Output Based on Based

question 96

Multiple Choice

Exhibit 15-6
Below you are given a partial Excel output based on a sample of 16 observations.
-Refer to Exhibit 15-6. The interpretation of the coefficient of x₁ is that

• A)a one unit change in x₁ will lead to a 3.682 unit decrease in y
• B)a one unit increase in x₁ will lead to a 3.682 unit decrease in y when all other variables are held constant
• C)a one unit increase in x₁ will lead to a 3.682 unit decrease in x₂ when all other variables are held constant
• D)It is impossible to interpret the coefficient.

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Definitions:

Systematic Risk

The risk inherent to the entire market or market segment, also known as market risk or un-diversifiable risk.

Risk Premium

The additional return required by investors for taking a higher level of risk, compared to a safer investment.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, visible in GDP, real income, employment, industrial production, and wholesale-retail sales.

Inflation

The rate at which the aggregate price level for goods and services grows, weakening the purchasing strength.