The data in the following table show the number of shares selling (millions) and the expected price for 10 selected initial public stock offerings.

Company

Shares

Price ($)

American Physician

5

15

Apex Silver Mines

9

14

Dan River

6.7

15

Franchise Mortgage

8.75

17

Gene Logic

3

11

International Home Foods

13.6

19

PRT Group

4.6

13

Rayovac

6.7

14

RealNetworks

3

10

Software AG Systems

7.7

13

Microsoft Excel was used to determine the least-square regression equation. Part of the computer output is shown blow.

SUMMARY OUTPUT

Regression Statistics

Multiple R

0.862427558

R Square

0.743781293

Adjusted R Square

0.711753955

Standard Error

1.419337727

Observations

10

ANOVA

df

SS

MS

F

Significance F

Regression

1

46.78384333

46.78384

23.22333

0.001322952

Residual

8

16.11615667

2.01452

Total

9

62.9

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Upper 95%

Intercept

9.264947166

1.099136438

8.429297

2.99E-05

6.730332356

11.79956198

Shares

0.710514744

0.147438496

4.819059

0.001323

0.370520742

1.050508746

1. Use the output shown above and write a equation that can be used to predict the price.
2. Comment on the strength of the relationship between the price and the number of shares.
3. Is the independent variable (number of shares) significant at Alpha ( = .05)?