The accompanying data file shows information on 264 initial public offering (IPO) firms. The data include the initial return (Initial), price revision (Revision), and whether or not the firm is high-tech.

a. Estimate a model with the initial return as the response variable and the price revision and the high-tech dummy variable as the explanatory variables.

b. Reestimate the model with price revision along with the dummy variable and the product of the dummy variable and the price revision.

c. Which of these models is the preferred model? Explain. Use this model to estimate the initial return for a high-tech firm with a 15% price revision. Compute the corresponding initial return for a firm that is not high-tech.

Initial	Revision	High-Tech
33.93	7.14	No
18.68	-26.39	No
2.42	3.13	No
6.29	-46.15	Yes
0.00	-12.50	No
2.73	0.00	Yes
14.43	0.00	Yes
0.00	-21.74	No
0.00	-17.65	No
0.00	-5.88	No
1.22	-5.26	No
11.11	7.14	No
7.95	4.76	No
13.46	11.11	Yes
1.67	-45.45	Yes
16.50	-33.33	Yes
5.25	5.26	Yes
2.00	-41.67	Yes
4.91	-15.38	No
16.67	12.50	Yes
-24.38	-19.76	No
-7.78	12.50	No
33.93	33.33	Yes
8.06	3.33	No
-10.00	-9.09	Yes
1.33	-42.31	Yes
0.10	-23.08	Yes
0.00	-19.30	No
15.91	7.32	No
12.86	0.00	Yes
11.62	0.00	No
8.88	-11.11	Yes
0.08	-13.33	No
12.26	3.33	No
4.37	-27.27	Yes
13.75	0.00	No
3.47	0.00	Yes
11.94	5.88	No
28.24	13.33	No
39.75	25.00	No
22.86	7.69	Yes
0.00	-9.52	No
3.62	-20.00	Yes
19.18	-29.17	No
9.21	5.56	No
0.00	0.00	No
12.50	6.67	Yes
-1.21	-7.17	No
15.52	11.54	Yes
0.00	-0.59	Yes
0.87	-14.81	No
0.10	-16.67	Yes
11.43	7.69	Yes
0.00	-7.14	No
0.85	-7.14	No
0.00	-27.27	No
0.42	-7.69	Yes
33.50	26.32	No
8.07	7.69	No
2.08	-25.00	Yes
7.14	-22.22	Yes
0.00	-5.01	No
6.06	-2.94	No
26.58	18.75	No
36.36	37.50	Yes
3.71	-41.67	Yes
16.90	3.57	No
2.06	0.00	No
33.39	20.00	No
4.21	-6.67	Yes
0.38	-18.75	No
0.67	0.00	No
15.38	8.33	Yes
0.00	-22.45	No
2.00	-27.27	Yes
23.53	13.33	Yes
-13.46	-18.75	Yes
0.00	-12.50	No
0.17	-7.69	Yes
13.10	5.00	No
23.53	13.33	Yes
10.67	-42.31	Yes
36.92	9.09	No
10.34	-42.00	No
10.91	-15.38	No
0.33	0.00	No
0.00	-20.00	No
0.04	-11.54	No
0.00	-21.88	Yes
5.36	-3.45	No
5.36	37.93	No
42.86	10.53	Yes
15.45	3.57	No
15.63	0.00	No
35.71	40.00	Yes
0.00	-29.73	Yes
5.00	-5.62	No
6.94	0.00	No
25.00	6.67	No
-2.82	-11.36	No
10.59	6.25	No
17.65	-30.04	Yes
11.67	5.88	No
15.67	-18.18	Yes
5.31	3.57	Yes
6.43	-6.67	No
15.79	-2.56	No
2.31	-7.14	No
6.58	-7.69	No
7.59	4.29	No
1.73	-7.50	Yes
0.57	-6.67	Yes
0.00	0.00	No
0.00	-23.53	No
7.29	-36.36	Yes
35.71	40.00	Yes
0.00	-28.89	No
20.63	6.67	Yes
19.64	21.74	No
35.71	16.67	Yes
-7.36	-21.74	No
43.75	14.29	Yes
35.57	16.67	No
7.33	3.45	No
0.00	-10.53	No
6.25	0.00	No
0.00	-7.14	Yes
31.13	7.14	No
0.00	-16.67	No
1.11	-30.77	Yes
13.71	-22.22	Yes
2.50	-9.09	Yes
0.00	-13.33	No
40.38	-46.91	Yes
1.93	7.69	Yes
0.00	-20.00	No
19.23	-10.34	No
24.46	9.40	No
9.62	8.33	No
1.44	-0.71	Yes
-4.00	-9.09	No
0.07	-6.25	No
12.16	2.78	No
6.88	6.67	Yes
0.43	-41.67	Yes
15.69	0.00	No
0.04	20.42	No
0.00	-25.00	No
7.14	-50.00	Yes
2.10	-23.08	Yes
10.71	0.00	Yes
3.85	-53.57	Yes
20.00	2.94	No
0.10	-10.19	Yes
2.60	-16.67	Yes
10.00	-4.76	No
11.36	0.00	No
21.05	18.75	No
0.25	-20.00	No
17.71	6.25	Yes
-1.25	4.92	No
2.14	-6.67	Yes
0.00	-7.69	Yes
2.50	-7.69	Yes
8.00	7.14	No
0.00	4.55	No
21.95	10.81	No
5.00	10.53	No
0.00	0.00	No
0.12	-33.33	Yes
38.64	-42.00	Yes
0.08	-25.00	Yes
36.79	27.27	Yes
4.00	-8.33	Yes
1.88	-27.27	No
0.45	-8.33	No
13.86	2.33	Yes
2.00	-3.38	Yes
-0.14	-6.67	No
14.53	-28.52	No
2.86	-9.97	No
0.00	13.04	No
3.85	-7.14	No
13.42	18.75	No
0.00	-6.25	No
15.63	4.35	No
11.67	-22.48	Yes
8.70	-4.17	Yes
1.89	0.00	No
16.67	-16.67	Yes
4.29	-6.67	Yes
2.00	0.00	No
13.06	6.25	Yes
0.07	-12.50	No
13.46	0.00	No
1.43	-4.55	No
3.00	Fantastic news! We've Found the answer you've been seeking! Answer rating: 85% (7 reviews) a b c Using adjusted R 2 Model 1 is better with the higher valu...View the full answer Answered By Nyron Beeput I am an active educator and professional tutor with substantial experience in Biology and General Science. The past two years I have been tutoring online intensively with high school and college students. I have been teaching for four years and this experience has helped me to hone skills such as patience, dedication and flexibility. I work at the pace of my students and ensure that they understand. My method of using real life examples that my students can relate to has helped them grasp concepts more readily. I also help students learn how to apply their knowledge and they appreciate that very much. 4.00+ 1+ Reviews 10+ Question Solved Related Book For   Business Statistics Communicating With Numbers ISBN: 9781260716306 4th Edition Authors: Sanjiv Jaggia, Alison Kelly See More Books Question Posted: Jul 21, 2023 07:37 AM See More Questions Students also viewed these Business questions Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes... The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan... The accompanying data file shows the Fortune 500 rankings of America's largest corporations for 2010. Next to each corporation are its market capitalization (in billions of dollars as of March 26,... Jilmar Company acquired a delivery truck and made payment of P2,870,000 analyzed as follows: Price of truck - P2,500,000 Charge for extra equipment - P150,000 Value added tax (recoverable) -... What is the average collection cycle for Rian Company? Use the below information for solving the question 2008 Selected Income Statement Items for Rian Company Cash Sales ..... $ 298,000 Credit Sales... If couple forces of F = 10 lb are applied perpendicular to the lever of the clamp at A and B, determine the clamping force on the boards. The single square-threaded screw of the clamp has a mean... 17. A firm emerging from Chapter 11 bankruptcy that does not qualify for fresh-start reporting must still report the effect of the reorganization plan on its financial position and results of... Listed below are brain volumes (cm3) of unrelated subjects used in a study. Use a 0.01 significance level to test the claim that the population of brain volumes has a mean equal to 1100.0 cm3. 963... How the 4 formula compute Ke and when it is used ? ke = (6) ta ke - loe cheng =0 gober ke a kd trisk premium. ke = off B (Rm. Rf) CAPM An analyst for a mortgage company wants to better understand the quantitative relationship between housing starts (in 1,000s), the mortgage rate (in %), and the unemployment rate (in%). She gathers... The accompanying data file has the monthly returns (in %) for Apple over a five-year period. Estimate the capital asset pricing model (CAPM) for Apple where the risk-adjusted stock return (Apple_Adj)... Water at 80F and 20 psia is heated in a chamber by mixing it with saturated water vapor at 20 psia. If both streams enter the mixing chamber at the same mass flow rate, determine the temperature and... The current rate of interest on S-T Treasury Bills = 10%, intermediate term Gov. Bonds = 11%, Lt- Gov. Bonds = 12%, AA rate Corp. Bonds = 13.5% and the rate of inflation is 5%. Holding-period returns... Prepare Income Statement(absorption costing) for the second, third and fourth month. SALES (SP X unit sold) INCOME STATEMENT FORMAT (ABSORPTION COSTING) XXX Less: Cost of Goodsold VARIABLE COST (VC... The following shows the distribution of final exam scores in a large introductory psychology class. The proportion under the curve is given for two segments (short answers-no calculations required).... How much overhead was included in the cost of Job #461 at the beginning of January? * (1 Point). BREAD Co. uses a job order costing system. At the beginning of January, the company had 2 jobs in... 3. (3pt.) A state of a physical system is just a description of the system at an instant in time in terms of its properties. In classical mechanics, states are represented by points (in phase space).... Assess the effectiveness of the grandparent-parent-child backup technique, providing suggestions for implementing such a system. Provide support for your suggestions. From the e-Activity, evaluate... Find the radius of convergence in two ways: (a) Directly by the CauchyHadamard formula in Sec. 15.2. (b) From a series of simpler terms by using Theorem 3 or Theorem 4. Data are drawn from a bell-shaped distribution with a mean of 5 and a standard deviation of 2.5. a. What percentage of the observations are positive? b. What percentage of the observations are not... Consider a sample with 10 observations of 23, 8, 4, 2, 24, 15, 6, 0, 24, and 5. Use z-scores to determine if there are any outliers in the data; assume a bell-shaped distribution. A sample of the salaries of assistant professors on the business faculty at a local university revealed a mean income of $72,000 with a standard deviation of $3,000. a. Using Chebyshevs theorem, what... When credit terms for a sale are 2/15, n/40, the customer saves by paying early. What percent (rounded) would this savings amount to on an annual basis An industrial robot that is depreciated by the MACRS method has B = $60,000 and a 5-year depreciable life. If the depreciation charge in year 3 is $8,640, the salvage value that was used in the... What determines a firm's beta? Should firm management make changes to its beta? Be sure to consider the implications for the firm's investors using CAPM. Janos Bolyai Non Euclidean Geometry And The Nature Of Space 1st Edition - ISBN: 0262571749 - Free Book Study smarter with the SolutionInn App Get In Touch About Us Contact Us Career Jobs FAQ Campus Ambassador Company Info Security Copyrights Privacy Policy Terms & Condition SolutionInn Fee Scholarship Services Sitemap Fun Definitions Become Tutor Study Help Categories Recent Questions Expert Questions Copyright © 2024 SolutionInn All Rights Reserved. Get the SolutionInn - Study Help App