Consider the following output for a simple regression of company XYZ weekly stock prices vs. the S&P500 stock index, for the period January 2004 through August 2006. Consider XYZ's stock price to be the dependent variable and the S&P500 index to be the independent variable.

The actual observed value of XYZ's stock prices was 65.00 when the S&P500 index reached 1500. Using the above regression model, what is the value of the residual in XYZ's stock price corresponding to an S&P500 index value of 1500?

a. $3.65

b. $5.00

c. $4.35

d. $3.65

Transcribed Image Text:

Regression Statistics Multiple R R Square Adjusted R Standard Error Observations ANOVA Regression Residual Total Intercept S&P500 Index 0.93 0.87 0.86 3.20 140 Df 1 138 139 SS MS 9067.88 9067.8 XXXXXX 10.24 10482.0 Coefficients Standard -121.65 0.122 F 884.90 t Stat P-value 4.914 -24.74 1.37E-52 0.004 29.75 6.84E-62 Significance 6.84E-62 Lower 95% -131.37 0.11 Upper -111.93 0.13 Regression Statistics Multiple R R Square Adjusted R Standard Error Observations ANOVA Regression Residual Total Intercept S&P500 Index 0.93 0.87 0.86 3.20 140 Df 1 138 139 SS MS 9067.88 9067.8 XXXXXX 10.24 10482.0 Coefficients Standard -121.65 0.122 F 884.90 t Stat P-value 4.914 -24.74 1.37E-52 0.004 29.75 6.84E-62 Significance 6.84E-62 Lower 95% -131.37 0.11 Upper -111.93 0.13

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a 365 From the result Regressi... View the full answer