Reading 11: Correlation and Regression-LOS d习题精选 class, border, div, purpose, between

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Session 3: Quantitative Methods: Quantitative
Methods for Valuation
Reading 11: Correlation and Regression

LOS d: Differentiate between the dependent and independent variables in a linear regression.

 

 

 

The purpose of regression is to:

A) explain the variation in the dependent variable.

B) get the largest R2 possible.

C) explain the variation in the independent variable.

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The capital asset pricing model is given by: R_i =R_f + Beta ( R_m -R_f) where R_m = expected return on the market, R_f = risk-free market and R_i = expected return on a specific firm. The dependent variable in this model is:

A) Rm - Rf.

B) Rf.

C) Ri.

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The dependent variable is the variable whose variation is explained by the other variables. Here, the variation in R_i is explained by the variation in the other variables, R_f and R_m.

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The independent variable in a regression equation is called all of the following EXCEPT:

A) predicting variable.

B) predicted variable.

C) explanatory variable.

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The independent variable in a regression equation is called all of the following EXCEPT:

A) predicting variable.

B) predicted variable.

C) explanatory variable.

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The dependent variable is the predicted variable.

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Joe Harris is interested in why the returns on equity differ from one company to another. He chose several company-specific variables to explain the return on equity, including financial leverage and capital expenditures. In his model:

A) return on equity is the dependent variable, and financial leverage and capital expenditures are independent variables.

B) return on equity is the independent variable, and financial leverage and capital expenditures are dependent variables

C) return on equity, financial leverage, and capital expenditures are all independent variables.

土豆妮

Joe Harris is interested in why the returns on equity differ from one company to another. He chose several company-specific variables to explain the return on equity, including financial leverage and capital expenditures. In his model:

A) return on equity is the dependent variable, and financial leverage and capital expenditures are independent variables.

B) return on equity is the independent variable, and financial leverage and capital expenditures are dependent variables

C) return on equity, financial leverage, and capital expenditures are all independent variables.

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The dependent variable is return on equity. This is what he wants to explain. The variables he uses to do the explaining (i.e., the independent variables) are financial leverage and capital expenditures.

土豆妮

The purpose of regression is to:

A) explain the variation in the dependent variable.

B) get the largest R2 possible.

C) explain the variation in the independent variable.

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The goal of a regression is to explain the variation in the dependent variable.

土豆妮

The capital asset pricing model is given by: R_i =R_f + Beta ( R_m -R_f) where R_m = expected return on the market, R_f = risk-free market and R_i = expected return on a specific firm. The dependent variable in this model is:

A) Rm - Rf.

B) Rf.

C) Ri.