A Regression Estimates That Q = 35 - 0

question 19

Multiple Choice

A regression estimates that Q = 35 - 0.1 *X,where Q is the quit rate,X is the number of employees at the firm,and the firm sizes in the data set range from 50 to 100.If the firm has 350 employees then

• A) its quit rate is predicted to be 70%.
• B) its quit rate is predicted to be 35%.
• C) its quit rate is predicted to be 0%.
• D) we cannot predict the quit rate using this linear model.

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Definitions:

Rate of Return

Gains or losses incurred on an investment over a specifically defined period, formulated as a percentage of the investment’s kickoff cost.

Floating-rate Bonds

Bonds that have a variable interest rate, which adjusts periodically according to a benchmark interest rate or index.

Coupon Rate

The interest rate stated on a bond or other fixed-income security, representing the annual interest paid by the issuer to the bondholder.

Convertible Bond

This is a bond that provides the holder the ability to convert it into a set number of shares of the issuer's stock at agreed-upon times over the bond's term, often by the choice of the investor.