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Question 31 Suppose you work for a big pharmaceutical company, and you are interested in the relationship between REED investment and the com pany's market

Question 31

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Suppose you work for a big pharmaceutical company, and you are interested in the relationship between REED investment and the com pany's market value. If you would like to test the hypothesis that REED investments improve market value disproportionally [in other words, if you double R&D expenses, the market value more than doubles}, which of the following model should you choose? a] market_value = 130 + 161R &D + E b] log(market_value) = 160 + ,6] log(R &D) + E

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