a) Prepare scatter plots for each independent variable versus the dependent variable. What type of model do these scatter plots suggest might be appropri The scatter plots suggest that a linear relationship might be appropriate for both variables. The scatter plots suggest that there is no relationship between the either of the two independent variables and the dependent variable. The scatter plots suggest that a quadratic relationship might be appropriate for both variables. b) Let Y= Return, X1= PE Ratio, and X2= Risk. Obtain the regression results for the following regression model: r^f=bDf+b1x1+b2x2 Report the estimated regression equation you found. (Enter your answer using X1 for X1, and X2 for X2, Round your numerical values to five decimal pla ^i= Interpret the value of R2 for this model. (Express R2 as a percent. Round your answer to two decimal places.) The value of R2 suggests that % of variation in can be accounted for using this model. c) Obtain the regression results for the following regression model: ^f=b0+b1X1,+b2x2+b3X3i+b4x4 where X3=X12 and x4=x22. Report the estimated regression equation you found. (Enter your answer using X1 for X1,r,X2 for X2,X3 for X3i, and X4 for X4i, Round your numerical va ^i= Interpret the value of R2 for this model. (Express R2 as a percent. Round your answer to two decimal places.) The value of R2 suggests that % of variation in can be accounted for using this model. d) Which of the previous two models would you recommend that the analyst use? We should recommend the first model since the calculations are easier to perform. We should recommend the first model since it has the highest adjusted R2. We should recommend the second model since it has the highest adjusted R2. We should recommend the first model since it has fewer variables and is simpler. We should recommend the second model since it has more variables and is more complicated