Suppose you work for a software company and you would like to estimate the market value of your company. You hypothesize that the market value of a software company (response variable) is a linear function of its earnings (explanatory variable). To test this, you collect data on the earnings and market value of 4 companies in your industry. This results in the following data: Company earnings ($mm) market cap ($mm) Unicorn 12 70 Bolt 2 24 PsiCo 100 700 Big 50 450 You fit a linear regression to these data. The company you work for (BizStatCo) has earnings of $50 million. What is the model's estimate of the market cap for BizStatCo (i.e., what is the y^)?
Suppose you work for a software company and you would like to estimate the market value of your company. You hypothesize that the market value of a software company (response variable) is a linear function of its earnings (explanatory variable). To test this, you collect data on the earnings and market value of 4 companies in your industry. This results in the following data: Company earnings ($mm) market cap ($mm) Unicorn 12 70 Bolt 2 24 PsiCo 100 700 Big 50 450 You fit a linear regression to these data. The company you work for (BizStatCo) has earnings of $50 million. What is the model's estimate of the market cap for BizStatCo (i.e., what is the y^)?
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter4: Equations Of Linear Functions
Section: Chapter Questions
Problem 4SGR
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Suppose you work for a software company and you would like to estimate the market value of your company. You hypothesize that the market value of a software company (response variable) is a linear
| Company | earnings ($mm) | market cap ($mm) |
| Unicorn | 12 | 70 |
| Bolt | 2 | 24 |
| PsiCo | 100 | 700 |
| Big | 50 | 450 |
You fit a linear regression to these data. The company you work for (BizStatCo) has earnings of $50 million. What is the model's estimate of the market cap for BizStatCo (i.e., what is the y^)?
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