To study the relationship between the number of shares selling ("SHARES") and the expected price ("EPRICE") for initial public stock (IPO) offerings, a financial analyst collected a sample of 10 IPO offerings and recorded the number of shares selling and the expected price. The following table shows the data collected. SHARES EPRICE Company (in millions) (in $) 1 5.0 15 2 9.0 14 3 6.7 15 4 17 14 5 5 3.0 6 13.6 16 7 4.6 8 6.7 14 9 3.0 13 10 13 A simple linear regression model (EPRICE = a + B1.SHARES + c) was used to study the effect of SHARES on EPRICE, and its regression report is given below. Use the regression report to answer the following questions. Analysis of Variance (ANOVA) Sum of Squares Mean Squares Source Significance (MS) (Pr>F) Model D 5.526 0.0785 Residual Total 16.400 DF FRatio B (SS) D E F Estimate Standard Error t_stat p-Value Lower bound (95%) Upper bound (95%) Intercept Slope 12.738 H 1 0.121 14.100 2.016 0.0746 Correlation (0) R2 Adjusted R2 0.5805 K 0.2541 A Recover the following missing values. Box B = DF of Residual = (to O decimals) Box D = SSR = (to 3 decimals) Box F = MSE = to 3 decimals) Box G = F Ratio = (to 3 decimals) Box! - Standard Error of bo- (to 3 decimals) B. What is the estimated effect of SHARES on EPRICE? Provide a point estimate. Answer = (to 3 decimals) C. Given a = 1%, find the p-value of the test H: Bu = Ovs. H.:40. Note that the test is about the intercept parameter, not the slope parameter. a.) p-value 0.25 Answer - (Enter a, b, c, d, e, or f) D. Given a = 1%, find the p-value of the test H: 8. 0. Note that the test is about the slope parameter. The p-value = (to 4 decimals E. What is the margin of error required for constructing a 90% confidence interval estimate of (the slope parameter). Answer: Margin of error E = (to 3 decimals) F. A quick look at the sample found the expected stock price of Company 5 was $15 and the number of shares selling was 3 million shares. Does the financial analyst's regression model over- or under-estimate Company 5's expected price? And by how much? Does the model over- or underestimate the dependent variable EPRICE? Answer = (enter U or underestimate and O for overestimate.) . By how much? Answer = $ million dollars (to 2 decimals) G. What percentage of variation in the expected price is due to the number of shares selling? Answer = % (to 1 decimal) To study the relationship between the number of shares selling ("SHARES") and the expected price ("EPRICE") for initial public stock (IPO) offerings, a financial analyst collected a sample of 10 IPO offerings and recorded the number of shares selling and the expected price. The following table shows the data collected. SHARES EPRICE Company (in millions) (in $) 1 5.0 15 2 9.0 14 3 6.7 15 4 17 14 5 5 3.0 6 13.6 16 7 4.6 8 6.7 14 9 3.0 13 10 13 A simple linear regression model (EPRICE = a + B1.SHARES + c) was used to study the effect of SHARES on EPRICE, and its regression report is given below. Use the regression report to answer the following questions. Analysis of Variance (ANOVA) Sum of Squares Mean Squares Source Significance (MS) (Pr>F) Model D 5.526 0.0785 Residual Total 16.400 DF FRatio B (SS) D E F Estimate Standard Error t_stat p-Value Lower bound (95%) Upper bound (95%) Intercept Slope 12.738 H 1 0.121 14.100 2.016 0.0746 Correlation (0) R2 Adjusted R2 0.5805 K 0.2541 A Recover the following missing values. Box B = DF of Residual = (to O decimals) Box D = SSR = (to 3 decimals) Box F = MSE = to 3 decimals) Box G = F Ratio = (to 3 decimals) Box! - Standard Error of bo- (to 3 decimals) B. What is the estimated effect of SHARES on EPRICE? Provide a point estimate. Answer = (to 3 decimals) C. Given a = 1%, find the p-value of the test H: Bu = Ovs. H.:40. Note that the test is about the intercept parameter, not the slope parameter. a.) p-value 0.25 Answer - (Enter a, b, c, d, e, or f) D. Given a = 1%, find the p-value of the test H: 8. 0. Note that the test is about the slope parameter. The p-value = (to 4 decimals E. What is the margin of error required for constructing a 90% confidence interval estimate of (the slope parameter). Answer: Margin of error E = (to 3 decimals) F. A quick look at the sample found the expected stock price of Company 5 was $15 and the number of shares selling was 3 million shares. Does the financial analyst's regression model over- or under-estimate Company 5's expected price? And by how much? Does the model over- or underestimate the dependent variable EPRICE? Answer = (enter U or underestimate and O for overestimate.) . By how much? Answer = $ million dollars (to 2 decimals) G. What percentage of variation in the expected price is due to the number of shares selling? Answer = % (to 1 decimal)
