Retail Store X Income Y Retail Sales 123 55641 21886 55681 21934 55637 21699 4 55825 21901 LO 5 55772 21812 69 55890 21714 7 56068 21932 8 56299 22086 9 56825 22265 10 57205 22551 11 57562 22736 12 57850 22301 13 57975 22518 14 57992 22580 15 58240 22618 16 58414 22890 17 58561 23112 18 59066 23315 19 58596 22865 20 58631 22788 21 58758 22949 22 59037 23149 1. (25 points) For a sample of 20 monthly observations, a financial analyst wants to regress the percentage rate of return (Y) of the common stock of a corporation on the percentage rate of return (X) of the Standard & Poor's 500 index. The following information is available: 20 i=1 = 20 20 20 22.6 x = 25.4 x? = 145.7 xy = 150.5 i=1 i=1 i=1 a. Estimate the slope and intercept of the linear regression of Y on X. b. Interpret the slope of the sample regression line. c. Interpret the intercept of the sample regression line. 2. (25 points) Find and interpret the R for the regression of car sales on price, using the following data. Sales 420 380 350 400 440 380 450 420 Price 244 207 89 261 149 198 98 194 3. (25 points) In a study of the influence of financial institutions on bond interest rates in Germany, quarterly data over a period of 12 years were analyzed. The postulated model was where Yi = Bo+B1x1i + 2x2i + i Yi = change over the quarter in the bond interest rates X1i change over the quarter in bond purchases by financial institutions x2i = change over the quarter in bond sales by financial institutions The estimated regression coefficients were as follows: bi = 0.057 b2 = -0.065 Interpret these estimates. 4. (25 points) Use the data from the Retail Sales file to estimate the regression model y = o + Bxt + Y Yt1 + &t and test the null hypothesis that y = 0, where y= retail sales per household x+= disposable income per household