5) Find the following:
Year y = book value per share x = earning per share
1985 0.81 0.35
1986 1.32 0.57
1987 1.87 0.65
1988 2.48 0.70
1989 2.88 0.50
(a) Compute the sample regression coefficients bo and b1.
(b) Compute the estimated variance of the regression.
(c) Compute the standard error of the regression.
(d) Compute the estimated variance of b1.
(e) Compute the standard error of b1.
Step by step method for regression analysis is discussed here. Regression coefficients, coefficient of determination, scatter diagram and significance of regression model are explained in the solution.