Question: A financial analyst uses the following model to estimate a firms stock return: Return = 0 + 1P/E + 2P/S + , where P/E is

A financial analyst uses the following model to estimate a firmâ€™s stock return: Return = Î²0 + Î²1P/E + Î²2P/S + , where P/E is a firmâ€™s price-to-earnings ratio and P/S is a firmâ€™s price-to-sales ratio. A portion of the regression results is shown in the following table.

a. Calculate the standard error of the estimate.
b. Calculate and interpret the coefficient of determination.
c. Calculate the corresponding adjustedR2.

ANOVA Regression 2 918.746 459.373 2.817 0.0774 Residua 274402.786 163.066 Total df SS MS F Significance F 29 5321.532

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