One of the theories regarding initial public offering (IPO) pricing is that the initial return (Initial) on an IPO depends on the price revision (Revision). Another factor that may influence the initial return is whether or not the firm is high-tech. The following table shows a portion of the data on 264 IPO firms. Initial Revision HighTech 33.93 7.14 No 18.68 26.39 No 0.08 29.41 Yes

a-1. Estimate Initial = _o + ₁Revision + ₂d + , where the dummy variable d equals 1 for firms that are high-tech and 0 otherwise. (Negative values should be indicated by a minus sign. Round your answers to 4 decimal places.)

a-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.)

a-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.)

b-1. Estimate Initial = _o + ₁Revision + ₂d + , where the dummy variable d equals 1 for firms that are not high-tech and 0 otherwise. (Negative values should be indicated by a minus sign. Round your answers to 4 decimal places.)

b-2. Use the estimated model to predict 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.)

b-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.)