7 THIS AND THE NEXT TWO QUESTIONS REFER TO THE INFORMATION BELOW

Finance Aug 21, 2020

7 THIS AND THE NEXT TWO QUESTIONS REFER TO THE INFORMATION BELOW. Movie distribution companies are very interested in projecting levende brom the periodh after a movie noches Movie Ounch dates and advertising budgets depend on such projections. One such distribution contpary bad assolysts collect data for 65 movies. The data consists of box office revenues for the first mooth her movies opened in wis number of trader views through Twitter sin million views in the month before the movie open date. The analystteametiated linear regression whose output in Excel is given below. SUMMARY OUTPUT Regression Statistics Standard Chor Observations 65 ANOVA Regression Residual To of 1 63 G 55 MS 48186.71 48386.71 24183 22 38386 Incept Variable 1 Coeficients -0.87 Standard Evor 3.27 0.13 Star -0.27 11 23 0.79 0.00 Use the blank space below to answer the following questions a. Identify the dependent and independent variables in the analysis b. Write out the fitted least squares equation Write down the value of the slope coefficient estimate and interpreti d. compute the value of the conto determination and interpret
MUNTE BLIRULTURE U are very metus projectang leveres som Perignanter a movie antes. More contents and akiverlising budgets depend on such projections. One such distribution company had its analysts collect data for 65 movies. The data consists of box ottie revenues for the first month after movies opened in million USD as well as number of trailer views through Twitter clicks (in million views in the inonth before the movie open date. The analyst team estimated a linear regression whose output in Excel is given below,
UU UI er news through twitter Views) in the month before the movie open date. The analyst team estimated a linear regression. whose output in Excel is given SUMMARY OUTPUT Regression Stotistics Standard Error 19.59 Observations 65 ANOVA Regression Residual Total df 1 63 64 SS 48386.71 24183.27 72569.98 MS 48386.71 383.86 Stot Standard Error 3.27 0.13 Coefficients -0.87 1.41 Intercept X Variable 1 -0.27 P-value 0.79 0.00 11.23 Use the blank space below to answer the following questions: a. Identify the dependent and independent variables in the analysis, b. Write out the fitted least squares equation c. Write down the value of the slope coefficient estimate and interpret it. d. Compute the value of the coefficient of determination and interpret it. A B ? 1 IEE P 32

Expert Solution

Part (a)

Dependent Variable: Box office revenue for the first month after the movie opened (USD million) (Let's call it R)

Independent variable: Number of trailer views through Twitter Clicks (million views) in the month before movie open date (Let's call it N)

Part (b)

R = 1.41N - 0.87

Part (c)

Slope coefficient estimate = 1.41

Interpretation:

For a unit change in N, R will change in the same direction by 1.41
For a unit increase in N, R will increase by 1.41
For a unit decrease in N, R will decrease by 1.41

Part (d)

Coefficient of determination = SS of Regression / SS total = 48,386.71 / 72,569.98 = 0.6668

Interpretation:

Coefficient of determination of 0.6668 shows a moderate fit of the data as linear relationship between R and N.
The equation of regression has done a decent job in fitting the data linearly and hence it should be able to predict the dependent variable with reasonable degree of certainty based on independent variable.

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