Question #65

Reading: Reading 1 Multiple Regression

PDF File: Reading 1 Multiple Regression.pdf

Page: 30

Status: Unattempted

Part of Context Group: Q65-66 First in Group
Shared Context
- Using a 5% level of significance, there is: A) no evidence of serial correlation in the residuals. B) evidence of first-lag serial correlation in residuals. C) evidence of second-lag serial correlation in residuals.
Question
What is the predicted quarterly stock return, given the following forecasts? Employment growth = 2.0% GDP growth = 1.0% Private investment growth = -1.0%
Answer Choices:
A. 4.4%
B. 4.7%
C. 5.0%
Explanation
Predicted quarterly stock return is 9.50% + (−4.50)(2.0%) + (4.20)(1.0%) + (−0.30)(−1.0%) = 5.0%.
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