# Question: Computer database GROWCO describes the characteristics of 100 companies identified

Computer database GROWCO describes the characteristics of 100 companies identified by Fortune as among the fastest growing. Two of the variables listed are (1) estimated stock price/earnings ratio next year and (2) annual revenue growth (as a percentage).

a. Determine the least-squares regression equation for y = next year’s price/earning ratio estimate as a function of x = annual revenue growth. What would be the predicted value of y for a company whose annual revenue growth has been 150%?

b. What percentage of the variation in the magazine’s price/earnings estimates (y) is explained by the annual revenue growth percentage (x)? At the 0.05 level, does the slope of the equation differ significantly from 0?

c. Given x = 150%, construct and interpret the 95% confidence and prediction intervals associated with y.

a. Determine the least-squares regression equation for y = next year’s price/earning ratio estimate as a function of x = annual revenue growth. What would be the predicted value of y for a company whose annual revenue growth has been 150%?

b. What percentage of the variation in the magazine’s price/earnings estimates (y) is explained by the annual revenue growth percentage (x)? At the 0.05 level, does the slope of the equation differ significantly from 0?

c. Given x = 150%, construct and interpret the 95% confidence and prediction intervals associated with y.

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