By how much has the stock price increased or decreased per y

By how much has the stock price increased or decreased (per year) on average during the period? (Round your answer to 2 decimal places.)

Listed below is the selling price for a share of PepsiCo Inc. at the close of each year from 1990 to 2012.

Listed below is the selling price for a share of PepsiCo Inc. at the close of each year from 1990 to 2012. Year Price Year Price Year Price Year Price 1990 12.9135 1996 29.0581 2002 42.2200 2008 54.7700 1991 16.8250 1997 36.0155 2003 46.6200 2009 60.8000 1992 20.6125 1998 40.6111 2004 52.2000 2010 65.3300 1993 20.3024 1999 35.0230 2005 59.8500 2011 66.3500 1994 18.3160 2000 49.5625 2006 62.0000 2012 68.4300 1995 27.7538 2001 48.6800 2007 77.5100 b. Determine the least squares trend equation. (Round your answers to 2 decimal places.) Y hat = _____. e. By how much has the stock price increased or decreased (per year) on average during the period? (Round your answer to 2 decimal places.) (Click to select)IncreasedDecreased $ _____ per year Y hat=_____ d. Estimate the selling price in 2016. (Round your answer to 2 decimal places.) For 2016, Y hat =_____ and for 2000, Ya hat = _____+ _____t c. Calculate the selling price for the years 1995 and 2000. (Round your answers to 2 decimal places.) For 1995,

Solution

Let us assume year as independent variable and 1990 as year 1

The equation of the regression line is:

y = 12.012 + 2.665?x

We will find an equation of the regression line in 4 steps.

Step 1: Find X?Y and X2 as it was done in the table below.

Step 2: Find the sum of every column:

?X=276 , ?Y=1011.7534 , ?X?Y=14837.7915 , ?X2=4324

Step 3: Use the following equations to find a and b:

ab=?Y??X2??X??XYn??X2?(?X)2=1011.7534?4324?276?14837.791523?4324?2762?12.012=n??XY??X??Yn??X2?(?X)2=23?14837.7915?276?1011.753423?4324?(276)2?2.665

Step 4: Substitute a and b in regression equation formula

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c) For 1995, x = 5

y = 12.012+2.665(5) = 25.325

for 2000 x =10

y = 38.662

d) in 2016 x = 26

y = 81.29

e) Average increase = 68.43-12.9135/23

= 2.41376

X	Y	X?Y	X?X
1	12.9135	12.9135	1
2	16.825	33.65	4
3	20.6125	61.8375	9
4	20.3024	81.2096	16
5	18.316	91.58	25
6	27.7538	166.5228	36
7	29.0581	203.4067	49
8	36.0155	288.124	64
9	40.6111	365.4999	81
10	35.023	350.23	100
11	49.5625	545.1875	121
12	48.68	584.16	144
13	42.22	548.86	169
14	46.62	652.68	196
15	52.2	783	225
16	59.85	957.6	256
17	62	1054	289
18	77.51	1395.18	324
19	54.77	1040.63	361
20	60.8	1216	400
21	65.33	1371.93	441
22	66.35	1459.7	484
23	68.43	1573.89	529