The accompanying data file shows information on 264 initial public offering (IPO) firms. The data include the initial return (Initial), price revision (Revision), and whether or not the firm is high-tech.

a. Estimate a model with the initial return as the response variable and the price revision and the high-tech dummy variable as the explanatory variables.

b. Reestimate the model with price revision along with the dummy variable and the product of the dummy variable and the price revision.

c. Which of these models is the preferred model? Explain. Use this model to estimate the initial return for a high-tech firm with a 15% price revision. Compute the corresponding initial return for a firm that is not high-tech.

Initial	Revision	High-Tech
33.93	7.14	No
18.68	-26.39	No
2.42	3.13	No
6.29	-46.15	Yes
0.00	-12.50	No
2.73	0.00	Yes
14.43	0.00	Yes
0.00	-21.74	No
0.00	-17.65	No
0.00	-5.88	No
1.22	-5.26	No
11.11	7.14	No
7.95	4.76	No
13.46	11.11	Yes
1.67	-45.45	Yes
16.50	-33.33	Yes
5.25	5.26	Yes
2.00	-41.67	Yes
4.91	-15.38	No
16.67	12.50	Yes
-24.38	-19.76	No
-7.78	12.50	No
33.93	33.33	Yes
8.06	3.33	No
-10.00	-9.09	Yes
1.33	-42.31	Yes
0.10	-23.08	Yes
0.00	-19.30	No
15.91	7.32	No
12.86	0.00	Yes
11.62	0.00	No
8.88	-11.11	Yes
0.08	-13.33	No
12.26	3.33	No
4.37	-27.27	Yes
13.75	0.00	No
3.47	0.00	Yes
11.94	5.88	No
28.24	13.33	No
39.75	25.00	No
22.86	7.69	Yes
0.00	-9.52	No
3.62	-20.00	Yes
19.18	-29.17	No
9.21	5.56	No
0.00	0.00	No
12.50	6.67	Yes
-1.21	-7.17	No
15.52	11.54	Yes
0.00	-0.59	Yes
0.87	-14.81	No
0.10	-16.67	Yes
11.43	7.69	Yes
0.00	-7.14	No
0.85	-7.14	No
0.00	-27.27	No
0.42	-7.69	Yes
33.50	26.32	No
8.07	7.69	No
2.08	-25.00	Yes
7.14	-22.22	Yes
0.00	-5.01	No
6.06	-2.94	No
26.58	18.75	No
36.36	37.50	Yes
3.71	-41.67	Yes
16.90	3.57	No
2.06	0.00	No
33.39	20.00	No
4.21	-6.67	Yes
0.38	-18.75	No
0.67	0.00	No
15.38	8.33	Yes
0.00	-22.45	No
2.00	-27.27	Yes
23.53	13.33	Yes
-13.46	-18.75	Yes
0.00	-12.50	No
0.17	-7.69	Yes
13.10	5.00	No
23.53	13.33	Yes
10.67	-42.31	Yes
36.92	9.09	No
10.34	-42.00	No
10.91	-15.38	No
0.33	0.00	No
0.00	-20.00	No
0.04	-11.54	No
0.00	-21.88	Yes
5.36	-3.45	No
5.36	37.93	No
42.86	10.53	Yes
15.45	3.57	No
15.63	0.00	No
35.71	40.00	Yes
0.00	-29.73	Yes
5.00	-5.62	No
6.94	0.00	No
25.00	6.67	No
-2.82	-11.36	No
10.59	6.25	No
17.65	-30.04	Yes
11.67	5.88	No
15.67	-18.18	Yes
5.31	3.57	Yes
6.43	-6.67	No
15.79	-2.56	No
2.31	-7.14	No
6.58	-7.69	No
7.59	4.29	No
1.73	-7.50	Yes
0.57	-6.67	Yes
0.00	0.00	No
0.00	-23.53	No
7.29	-36.36	Yes
35.71	40.00	Yes
0.00	-28.89	No
20.63	6.67	Yes
19.64	21.74	No
35.71	16.67	Yes
-7.36	-21.74	No
43.75	14.29	Yes
35.57	16.67	No
7.33	3.45	No
0.00	-10.53	No
6.25	0.00	No
0.00	-7.14	Yes
31.13	7.14	No
0.00	-16.67	No
1.11	-30.77	Yes
13.71	-22.22	Yes
2.50	-9.09	Yes
0.00	-13.33	No
40.38	-46.91	Yes
1.93	7.69	Yes
0.00	-20.00	No
19.23	-10.34	No
24.46	9.40	No
9.62	8.33	No
1.44	-0.71	Yes
-4.00	-9.09	No
0.07	-6.25	No
12.16	2.78	No
6.88	6.67	Yes
0.43	-41.67	Yes
15.69	0.00	No
0.04	20.42	No
0.00	-25.00	No
7.14	-50.00	Yes
2.10	-23.08	Yes
10.71	0.00	Yes
3.85	-53.57	Yes
20.00	2.94	No
0.10	-10.19	Yes
2.60	-16.67	Yes
10.00	-4.76	No
11.36	0.00	No
21.05	18.75	No
0.25	-20.00	No
17.71	6.25	Yes
-1.25	4.92	No
2.14	-6.67	Yes
0.00	-7.69	Yes
2.50	-7.69	Yes
8.00	7.14	No
0.00	4.55	No
21.95	10.81	No
5.00	10.53	No
0.00	0.00	No
0.12	-33.33	Yes
38.64	-42.00	Yes
0.08	-25.00	Yes
36.79	27.27	Yes
4.00	-8.33	Yes
1.88	-27.27	No
0.45	-8.33	No
13.86	2.33	Yes
2.00	-3.38	Yes
-0.14	-6.67	No
14.53	-28.52	No
2.86	-9.97	No
0.00	13.04	No
3.85	-7.14	No
13.42	18.75	No
0.00	-6.25	No
15.63	4.35	No
11.67	-22.48	Yes
8.70	-4.17	Yes
1.89	0.00	No
16.67	-16.67	Yes
4.29	-6.67	Yes
2.00	0.00	No
13.06	6.25	Yes
0.07	-12.50	No
13.46	0.00	No
1.43	-4.55	No
3.00	Fantastic news! We've Found the answer you've been seeking! Answer rating: 83% (6 reviews) a b c Using adjusted R 2 Model 1 is better with the higher valu...View the full answer Answered By Nyron Beeput I am an active educator and professional tutor with substantial experience in Biology and General Science. The past two years I have been tutoring online intensively with high school and college students. I have been teaching for four years and this experience has helped me to hone skills such as patience, dedication and flexibility. I work at the pace of my students and ensure that they understand. My method of using real life examples that my students can relate to has helped them grasp concepts more readily. 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