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33 1 18 Die TB 19 IN 4 . Datafile Datafile One of the theories regarding initial public offering (IPO) pricing is that the initial

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33 1 18 Die TB 19 IN 4 . Datafile Datafile One of the theories regarding initial public offering (IPO) pricing is that the initial return y(the percentage change from offer to open price) on an IPO depends on the price revision x (the percentage change from pre-offer to offer price). Another factor that may influence the initial return is a high-tech dummy variable that equals 1 for high-tech firms and otherwise. The following table shows a portion of the data on 264 IPO firms from January 2001 through September 2004 High-Tech Initial Return 34.08 17.24 Price Revision 12.14 -24.07 3.55 -26.54 Picture Click here for the Excel Data File 0-1. Estimate y - 60+ 0x + 020 + where the dummy variable d equals 1 for firms that are high-tech (Round your answers to 2 decimal places.) Initial Return Price Revision High-Tech 0-2. Use the estimated model to predict the initial return of a high-tech firm with a 10% price revision (Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places.) Predicted teturn of a high-tech firm 4-3. Find the corresponding predicted return of a firm that is not high-tech (Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places.) Predicted return of a non high-tech flm b-1. Estimate y - %. + 0,* *0d +

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