A Regression Model Involving 3 Independent Variables for a Sample

question 65

Essay

A regression model involving 3 independent variables for a sample of 20 periods resulted in the following sum of squares.

a.Compute the coefficient of determination and fully explain its meaning.
b.At  = 0.05 level of significance, test to determine whether or not there is a significant relationship between the independent variables and the dependent variable.

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Definitions:

Common Stock Dividend

A payment made by a corporation to its shareholders, usually in the form of cash or additional shares, as a portion of the profits.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing ownership interest in the company.

Shares Outstanding

The total number of shares of a company's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the corporation or issuer.