6 1 The following equation was estimated using the data in CEOSAL1 RAW log(salary) (4 322) ( 276) log(sales) ( 0215) roe ( 00008) roe2 log(sa lary) ( 324) ( 033) log(sales) ( 0129) roe ( 00026) roe2 n 209, R2 282 This equation allows roe to have a diminishing effect on log(salary) Is this generality necessary Explain why or why no

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Question: 6.1 The following equation was estimated using the data in CEOSAL1.RAW: log(salary) (4.322) (.276) log(sales) (.0215) roe (.00008) roe2 log(sa lary)

6.1 The following equation was estimated using the data in CEOSAL1.RAW: log(salary) (4.322) (.276) log(sales) (.0215) roe (.00008) roe2 log(saˆ lary) (.324) (.033) log(sales) (.0129) roe (.00026) roe2 n 209, R2 .282. This equation allows roe to have a diminishing effect on log(salary). Is this generality necessary? Explain why or why no

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