Use the following scenario to answer the question. Scenario: Consider the follow

Question

Use the following scenario to answer the question. Scenario: Consider the following summary output from Microsoft Excel for a simple regression of company XYZ weekly stock prices vs. the S&P500; stock index, for the period January 2004 through August 2006. Consider XYZ's stock price to be the dependent variable and the S&P500; index to be the independent variable SUMMARY OUTPUT Regression Statistics Multiple FR R Square Adjusted R Standard Error Observations 0.93 0.87 0.86 3.20 140 ANOVA MS Significance Regression Residual Total 9067.88 9067.8 884.90 6.84E-62 138 139 XXXXXX 10.24 10482.0 Intercept S&P500; Index Coefficients Standard tStat P-value Lower 95% U 4.914 -24.74 1.37E-52 0.004 29.75 6.84E-62 121.65 0.122 131.37111.93 0.13 0.11

Explanation / Answer

Equation:

Price = - 121.65 + 0.122 * S&P

when S&P = 100

Price = - 121.65 + 0.122 * 1000

Price = - 121.65 + 122

Price = 0.35

B option

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