need help thanks!!! A stock analyst has gathered annual data stock and market re

Question

need help  thanks!!!

A stock analyst has gathered annual data stock and market return data for Anacott Industries and the S&P; 500. The analyst ran a regression of Anacott Industries' stock returns (y) on S&P; 500 market returns (x). The results of the regression are shown below: a = 0.0182 b = 1.034 R-square = 0.48 r = 0.69 In the regression, the S&P; 500 market returns ---------- variable, while Anacott Industries' stock are the returns are the variable. The y-intercept of the regression line is: 0.5567 0.0182 0.357 1.03 0.69 The slope of the regression line is : Approximately --------of the Variable in Anacott's stock returns can be explained by the variations in the market returns. Look at the Year 10 returns. The market return that year was 17%, so the regression model would predict Anacott's stock return to be ------- The model error (or residual) for this observation is -------- For each 1 percentage point increase in the market return, the regression model predicts Anacott's stock return to increase by -------- percentage points. True or False: Because R-square is greater than 0.5, there is overwhelming evidence that the independent variable causes the dependent variable. False True

Explanation / Answer

1. independent and dependent

2. this is equal to value of a = 0.0182

3. this is equalt o value of b = 1.034

4. this is equal to R square = 48%

5. 0.0182+0.17*1.034 = 19.38%

so residual = 21-19.38 = 1.62%

6. for every 1% increase in market return increase in anacott's stock increase by = 0.0182+1.034*1 = 1.0522%

7. this is false reasons (i) Forst thing R square is 0.48 which is less than. (ii) square has to be above 0.9 to say that independent variable cause the dependent variable.

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