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One of the theories regarding initial public offering (IPO) pricing is that the initial return (Initial) on an IPO depends on the price revision
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 intial return is whether or not the firm is high-tech. The following table shows portion of the diets on 254 IPO firms. 33.93 Revision 7.14 Highted 18.6 -26.39 NO 0.08 29.41 Yes Palcture Click here for the Excel Data File Hint: You have to first convert the high-tech categorical variable (Yes/No) Into a dummy variable (1/0) -1 Estimate Initial evision 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) Intare Revision -2. Use the estimated model to predict the intial 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 inalt of a high tech fem 3. Find the corresponding predicted return of a firm shat is not highter Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places Prestided ital return of a non high-tech m b-1. Estimate int where the cummy verable or equals 1 for foms that are not high-tech and 0 otherwise. INegative values should be indicated by a minus sign Round your answers to 4 decimal places) b-2. Use the estimates model to predict intel return of a gh-tech firm with a 10fs price revision (Round coefficient estimates to at least 4 decimal pisces and final answer to 2 decimal places Predited Indal tam if high-t b-3. Pind the corresponding predicted return of a firm that a not high-tech Round coefficient estimates to at least 4 decimal places and final answer to 2 decimal places Pradictulina um of a non nightm
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