Question

You believe that the price of Zoom Video conferencing stock and the price of American Airlines...

  1. You believe that the price of Zoom Video conferencing stock and the price of American Airlines stock will move in opposite directions. In order to test this relationship, we do a simple regression with the following variables:

    Z- dependent variable: month end price of Zoom Videoconferencing stock
    A- independent variable : month end price of American Airlines stock
    Data for the last 9 months of 2019 are available (9 observations)

    Based on the data, we compute the following:
    Var (A) = 6.9854
    Cov (A,Z) = -1.3735
    E(A) = 29.4767
    E(Z) = 79.6444
    Std Error of Estimate = 10.6733
    TSS = 799.5928
    1. Consider the equation Zt = b0 + b1 At + εt
      Based on the numbers given above, complete the following table

Variable

Estimate

Std error

t-statistic

Slope b1

1.42777   

Constant b0

42.2359   

R-square

N/A

N/A

F statistic

b.Are the coefficients (slope and/or constant) significant at the .05 level?

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