Exhibit 12-5 You Are Given the Following Information About Y and X

question 35

Multiple Choice

Exhibit 12-5
You are given the following information about y and x.

-Refer to Exhibit 12-5. The least squares estimate of b₀ (intercept) equals

• A)1
• B)-1
• C)6

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Definitions:

NPV

Net Present Value, a calculation used to estimate the profitability of an investment or project by summing the present values of all expected future cash flows.

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 1 indicates certainty.

Capital Budgeting

The process by which a business evaluates and selects long-term investments that are expected to yield returns over a period of time.

Risk Character

A term describing the unique attributes and level of risk associated with an investment or financial decision.