stock in a large computer company. The data include
36 monthly returns on the company, as well as returns on
the entire stock market and returns on short-term Treasury
Bills. Complete parts below.
- The Accompanying Data Set Tracks The Monthly Performance Of Stock In A Large Computer Company The Data Include 36 Month 1 (38.91 KiB) Viewed 27 times
- The Accompanying Data Set Tracks The Monthly Performance Of Stock In A Large Computer Company The Data Include 36 Month 2 (59.84 KiB) Viewed 27 times
for (c) using the above information.
Data Table Company Return -0.042122 -0.013405 0.198114 -0.004865 0.035918 0.089032 -0.047146 0.102083 -0.234317 0.051673 0.196961 0.182497 0.305104 0.051821 0.192219 -0.201564 - 0.157398 -0.131664 Market Return -0.061542 0.010464 0.010824 -0.042591 0.093722 -0.009054 -0.003144 -0.095008 0.048242 0.000797 0.079205 0.014928 0.032683 0.075621 0.032504 0.005762 0.037076 -0.049239 Treasury Bill Return 0.005919 0.005784 0.006473 0.006902 0.006433 0.005903 0.006645 0.006083 0.005969 0.006652 0.005738 0.006022 0.004684 0.004727 0.004386 0.005237 0.004536 0.004261 Company Return 0.112174 0.167467 -0.052603 0.057399 -0.003662 0.113698 0.166463 0.034593 0.118202 0.044027 0.004935 -0.190012 -0.016577 -0.005496 -0.031526 0.155544 0.115466 0.047418 Market Return 0.038224 0.046304 -0.021442 0.000257 -0.051086 0.097504 0.005514 0.023369 0.040736 -0.000155 0.009575 -0.027617 0.037487 -0.002687 0.015809 0.017737 0.051493 0.001552 Full data set Treasury Bill Return 0.004918 0.004626 0.004563 0.004255 0.003954 0.003719 0.003112 0.002729 0.003397 0.003328 0.002713 0.003172 0.002929 0.002514 0.002654 0.002206 0.002303 0.002295
(a) Begin by inspecting timeplots of the variables Company Return and Market Return. Do the timeplots show trends that would be obscured in the scatterplot of Company Return and Market Return? Construct the timeplot for Company Return. Choose the correct graph below. A. OB OC. OD 0.327 0.32 0.32 0.321 Company Return Company Return Company Return -0.32- -0.32 -0.32- -0.32- Time Time Time Time Do there appear to be any trends in Company Return? O A. Company Return initially tends to decrease with time, and then the trend reverses and it begins to increase. O B. Company Return tends to increase with time. O C. Company Return tends to decrease with time. D. There do not appear to be any trends that would be obscured in the scatterplot. Choose the correct timeplot for Market Return below. OA OB OC. 0.157 0.15- 0.15 0.15 | Market Return Market Return Market Return Market Return 40 Amber -0.15- -0.15- -0.15- -0.1511 Time Time Time Time
Do there appear to be any trends in Market Return? O A. Market Return tends to decrease with time. O B. Market Return initially tends to decrease with time, and then the trend reverses and it begins to increase. O C. Market Return tends to increase with time. D. There do not appear to be any trends that would be obscured in the scatterplot. (b) Create a scatterplot for Company Return on Market Return. Does a line seem to be a good summary of the association between these variables? Choose the correct graph below. OA. OB OC. A 0.32 0.32- 0.32 Company Return Company Return 10.15 E -0.15 Company Return -0.15. 0.15 -0.15 10.15 -0.15. 0.15 10.32 Market Return 10.32 Market Return lotte 10.32 Market Return 10.32 Market Return Does a line seem to be a good summary of the association between these variables? O A. The scatterplot shows no obvious pattern, so there is no association and a line does not summarize any association. OB. The scatterplot shows weak association, but there is a curved pattern, so a line does not summarize the association. C. The scatterplot shows weak association. A line seems to be a reasonable summary of the association. OD. The scatterplot shows strong association and a line is a reasonable summary of the association. (c) Estimate the least squares linear equation for Company Return on Market Return. Interpret the intercept and slope. Be sure to include their units. Note if either estimate represents a large extrapolation and is consequently not reliable. Complete the equation for the fitted line below. + Estimated Company Return = 0.01478 + 1.5959 Market Return (Round to four decimal places as needed.)