Problem: The data in the following table show the number of shares selling (millions and the expected price (average of projected low price and projected high price) for 10 selected initial public stock offering.
See data below:
A. Develop an estimated regression equation with the number of shares selling as the independent variable and the expected price as the dependent variable.
B. As the 0.05 level of significance, is there a significant relationship between the two variables?
C. Did the estimated regression equation provide a good fit? Explain.
D. Use the estimated regression equation to estimate the expected price for a firm considering an initial public offering of 6 millions shares.
| Company |
Shares |
Price |
| American Physician |
5 |
15 |
| Apex Silver Mines |
9 |
14 |
| Dan River |
6.7 |
15 |
| Franchise Mortgage |
8.75 |
17 |
| Gene Logic |
3 |
11 |
| International Home Foods |
13.6 |
19 |
| PRT Group |
4.6 |
13 |
| Rayovac |
6.7 |
14 |
| RealNetworks |
3 |
10 |
| Software AG Systems |
7.7 |
13 |