*R2.47. Companies assets and sales How are the assets and sales of major corporations related? The data set is the same as that for Exercise 2.44. The variable Banks in the data set is 1 for the banks and 0 for the other companies. As Exercise 2.44 showed, it is best to take the logarithm of most of these variables. Here are a scatterplot and a regres- sion relating the logarithm of assets and the logarithm of sales. The banks are shown in red: | LAss 4.50 3.75- 3.00- 2.25 3.00 3.75 LSI Response variable is: LogAssets R squared = 73.7% s = 0.2741 Variable Intercept LogSales Banks Coefficient 0.422563 0.868488 0.945675 4.50 a) What is an appropriate interpretation of the coefficient of LogSales? b) What is an appropriate interpretation of the coefficient of Banks? c) Is the use of a variable such as Banks appropriate for these data? Explain.
*R2.47. Companies assets and sales How are the assets and sales of major corporations related? The data set is the same as that for Exercise 2.44. The variable Banks in the data set is 1 for the banks and 0 for the other companies. As Exercise 2.44 showed, it is best to take the logarithm of most of these variables. Here are a scatterplot and a regres- sion relating the logarithm of assets and the logarithm of sales. The banks are shown in red: | LAss 4.50 3.75- 3.00- 2.25 3.00 3.75 LSI Response variable is: LogAssets R squared = 73.7% s = 0.2741 Variable Intercept LogSales Banks Coefficient 0.422563 0.868488 0.945675 4.50 a) What is an appropriate interpretation of the coefficient of LogSales? b) What is an appropriate interpretation of the coefficient of Banks? c) Is the use of a variable such as Banks appropriate for these data? Explain.
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter5: Inverse, Exponential, And Logarithmic Functions
Section: Chapter Questions
Problem 15DE
Related questions
Question
Transcribed Image Text:*R2.47. Companies assets and sales How are the assets and
sales of major corporations related? The data set is the
same as that for Exercise 2.44. The variable Banks in the
data set is 1 for the banks and 0 for the other companies.
As Exercise 2.44 showed, it is best to take the logarithm of
most of these variables. Here are a scatterplot and a regres-
sion relating the logarithm of assets and the logarithm of
sales. The banks are shown in red:
LAss
4.50-
3.75
3.00
2.25 3.00 3.75
LSI
Response variable is: LogAssets
R squared = 73.7 % s = 0.2741
Variable
Intercept
LogSales
Banks
Coefficient
0.422563
0.868488
0.945675
4.50
a) What is an appropriate interpretation of the coefficient of
LogSales?
b) What is an appropriate interpretation of the coefficient of
Banks?
c) Is the use of a variable such as Banks appropriate for
these data? Explain.
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