Use the Following to Answer the Questions Below

question 37

Multiple Choice

Use the following to answer the questions below.
The following is output from regression analysis performed to develop a model for predicting a firm's Price-Earnings Ratio (PE) based on Growth Rate, Profit Margin, and whether or not the firm is Green (1 = Yes, 0 = No) .
-Which of the following is the correct interpretation for the regression coefficient of Green?

• A) The regression coefficient indicates that the PE ratio of a firm that is green will, on average, be 2.09 points higher than a firm that is not green with the same profit growth rate and profit margin.
• B) The regression coefficient indicates that the PE ratio of a firm that is green will, on average, be 2.09 points lower than a firm that is not green with the same profit growth rate and profit margin.
• C) The regression coefficient indicates that the PE ratio of a firm that is green will, on average, be 2.09 times higher than a firm that is not green.
• D) The regression coefficient indicates that the PE ratio of a firm that is green will, on average, be 2.09 times lower than a firm that is not green.
• E) The regression coefficient is not significantly different from zero.

---

Definitions:

Free Enterprise

An economic system where private businesses operate in competition, largely free of state control, with the prices of goods and services determined by the open market.

Capital

Financial assets or the financial value of assets, such as buildings, machinery, and equipment, used to produce goods and services.

Brazilian Factory Worker

An individual employed in the manufacturing sector in Brazil, often dealing with the challenges of labor conditions and economic factors.

American Factory Worker

An employee working within the manufacturing sector of the United States, often associated with manual labor and industrial production.