A Simple Linear Regression of the Return of Firm a

question 54

Multiple Choice

A simple linear regression of the return of firm A ( ) on the return of firm B ( ) ,based on 18 observations,is = 2.2 + 0.4 .If the coefficient of determination from this regression is 0.09 calculate the correlation between and .

• A)0.03
• B)0.04
• C)0.09
• D)0.30

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Definitions:

Income Statement

A financial document that reports a company’s revenues, expenses, and profits over a specific period.

Statement of Changes

A financial document detailing how an entity's equity has changed over a period of time due to various business activities.

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Balance Sheet

is a financial statement that provides a snapshot of a company's financial condition at a specific time, detailing assets, liabilities, and owners' equity.