Use the estimated regression equation from Problem 79. How much is the highest stock price expected to increase or decrease if the risk-free interest rate rises by 0.3?

Problem 79

Use the information given in Problem 78 to estimate the regression of the monthly highest stock price on the risk-free interest rate.

Problem 78

Compute the correlation coefficient and the R² between the monthly highest prices of a stock (y, unit: dollar) and risk-free interest rates (x, unit: %).

Transcribed Image Text:

X 1.70 1.74 1.75 1.91 2.17 2.06 2.04 1.93 1.88 1.92 1.90 1.91 y 12.5 12.1 11.9 17.4 24.8 19.3 19.5 18.2 17.6 19.6 25.2 31.3