Question: A research analyst is trying to determine whether a firm s price - earnings ( PE ) and price - sales ( PS ) ratios

A research analyst is trying to determine whether a firms price-earnings (PE) and price-sales (PS) ratios can explain the firms stock performance over the past year. A PE ratio is calculated as a firms share price compared to the income or profit earned by the firm per share. Generally, a high PE ratio suggests that investors are expecting higher earnings growth in the future compared to companies with a lower PE ratio. The PS ratio is calculated by dividing a firms share price by the firms revenue per share for the trailing 12 months. In short, investors can use the PS ratio to determine how much they are paying for a dollar of the firms sales rather than a dollar of its earnings (PE ratio). In general, the lower the PS ratio, the more attractive the investment. The accompanying table shows a portion of the year-to-date returns (Return in %) and the PE and PS ratios for 30 firms.
a-1. Estimate: Return =\beta 0+\beta 1PE +\beta 2PS +\epsi .(Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)
Predicted Return=______+_____PE+______PS.
c. What is the predicted return for a firm with a PE ratio of 10 and a PS ratio of 2?(Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round final answer to 2 decimal places.)
d. What is the standard error of the estimate? (Round your answer to 2 decimal places.)
 A research analyst is trying to determine whether a firms price-earnings

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