Question

The prices of Rawlston, Inc. stock ( y) over a period of 12 days, the number of shares (in 100s) of the company's stocks sold ( x ₁), and the volume of exchange (in millions) on the New York Stock Exchange ( x ₂) are shown below.

	Day	(y)	(x1)	(x2)
	1	87.50	950	11.00
	2	86.00	945	11.25
	3	84.00	940	11.75
	4	83.00	930	11.75
	5	84.50	935	12.00
	6	84.00	935	13.00
	7	82.00	932	13.25
	8	77.50	938	16.00
	9	78.50	925	15.00
	10	79.00	900	16.50
	11	77.00	875	17.00
	12	77.50	870	17.50

Excel was used to determine the least squares regression equation. Part of the computer output is shown below.

ANOVA
	df	SS	MS	F	Significance F
Regression	2	134.0858	67.0429	45.9081	0.0000
Residual	9	13.1433	1.4604
Total	11	147.2292
	Coefficients	Standard Error	t Stat	P-value
Intercept	123.5911	26.4129	4.6792	0.0012
(x1)	-0.0209	0.0251	-0.8356	0.4250
(x2)	-1.6302	0.2757	-5.9137	0.0002

a.	Use the output shown above and write an equation that can be used to predict the price of the stock.
b.	Interpret the coefficients of the estimated regression equation that you found in part (a).
c.	At 95% confidence, determine which variables are significant and which are not. Explain why.
d.	If on a given day, the number of shares of the company that were sold was 94,500 and the volume of exchange on the New York Stock Exchange was 16 million, what would you expect the price of the stock to be?

Answer 1