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Principles of Finance

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Principles of FinanceVideo Activity

Simple Linear Regression

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1 .
Based on the scatter plot shown, will the correlation coefficient be a positive value or negative value? Would you estimate that the correlation is significant for the relationship between radio ads and revenue?
2 .
For the linear regression model for ads versus revenue, the slope is shown as 78.075. How would this slope be interpreted (that is, provide a verbal description for the meaning of the slope of 78.075)?

How to Calculate Correlation for Stocks, Bonds, and Funds

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3 .
Based on the presentation shown in the video, is the FTSE 100 index correlated with the value of sterling? Or are the two measures uncorrelated? What data leads to your conclusion?
4 .
Based on the presentation in the video, is there a correlation between stock funds and bond funds? Why is this information important to an investor trying to design a portfolio?
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© Jan 8, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.