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3. (20 points) An analyst intends to investigate the relationship between (1) Complete all the missing values (Marked with lower letters in Bold and underpricing
3. (20 points) An analyst intends to investigate the relationship between (1) Complete all the missing values (Marked with lower letters in Bold and underpricing and the reputation of underwriter in the initial public offering (IPO) Italic) in Figure 1. (12 points) process. Underpricing = (P - P.) / P , Underwriter reputation (RANK) is a score a b C d e between 1.1 and 9.1 with 1.1 being the least reputable underwriter and 9.1 being the most prestigious underwriter (for RANK, X = 5.73, E(X, - X)? =152.3871) Company g h i ID Underpricing Rank 0.024 3.1 2 0.109 7 3 0.022 3.1 0.25 2.1 5 -0.063 6 (2) What is the estimated regression equation relating the underwriter reputation 0.234 4.1 to underpricing? (1 points) 7 0.125 3.333 8 -0.021 9 0.042 8.1 10 0.08 6 11 0.02 4.1 7.1 0.036 1.5 (3) What percentage of the variance in underpricing has been explained by 0.018 8 regression? Is this percentage significant at a = 0.05?(2 points) -0.017 8.875 16 0.067 3.1 17 0.035 8.75 18 0.048 8.75 19 0.083 8.75 20 0.049 5.875 21 0 9 22 0.152 1.1 23 0.124 8.1 SUMMARY OUTPUT: Dependent variable: Underpricing (4) Suppose an issuing company chose an underwriter with the reputation score of Regression Statistics 6.000, what will be your predication of the level of underpricing? (1 points) R Square ANOVA df Sum of Squares Mean Squares Regression Residual 0.1091 Total 0.1291 (5) Construct a 95% confidence interval for B, (1 points) Coefficients Standard Error t Stat Intercept 0.1275 0.0367 3.4742 Rank -0.0115 d
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