Use the Following Data Set to Answer the Questions

question 40

Multiple Choice

Use the following data set to answer the Questions: $\begin{array} { | l | l | l | l | l | l | l | l | l } \hline \begin{array} { l } \text { Length of } \\\text { commute in } \\\text { miles } ( x ) \end{array} & 2 & 10 & 8 & 30 & 12 & 70 & 15 & 20 \\\hline \begin{array} { l } \text { Time of } \\\text { commute in } \\\text { minutes (y) }\end{array} & 5 & 25 & 20 & 45 & 25 & 80 & 30 & 35 \\\hline\end{array}$
-According to the regression equation, each additional mile adds, on average, about how many minutes to the commute?

• A) 0.5
• B) 1
• C) 1.5
• D) 2

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Definitions:

Financial Leverage

A difference between the rate of return on assets and the rate paid to creditors.

Issuing Common Stock

The process by which a company sells new shares of its common stock to investors, thereby raising equity capital.

Return On Equity

A measure of financial performance calculated by dividing net income by shareholder equity, indicating how effectively a company uses investments to generate earnings.

Average Total Stockholders' Equity

Average total stockholders' equity calculates the mean equity held by shareholders over a given period, indicating the ownership value in a company.