Use the following scenario to answer the question. Scenaio: Consider the followi

Question

Use the following scenario to answer the question. Scenaio: Consider the following summary output from Microsoft Excel for a simple regression of company XYZ weekly stock prices vs. the S&PE00; stock index, for the period January 2004 through August 2006 Consider XYZ's stock price to be the dependent variable and the S&PS0D; index to be the independent vaniable SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Standard Error Observations 0.93 0.87 0.86 3.20 140 ANOVA MS Regression Residual Total 9067.88 9067,8 884.90 684E-62 138 XXXXXX 0.24 139 10482.0 Coefficients Standard tStat P-value Lower 95% Upper Intercept S&P500; Index 121.65 0.122 4.914 -24.74 1.37E-52 0.004 29.75 6.84E-62 131.37 0.11 111.93 0.13 What is percentage of the variation in XYZ's stock price explained by the S&PECO; index value? O 10 percent 93 percent 55 percent O 87 percent

Explanation / Answer

From the output we have r^2 = 0.87

Percentage of variation XYZ'S stock price explained by the S&P500 index value is 0.87 = 87%

87 percent

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