(e) Predict the rate of return of Company 2 if the rate of return of Company 1 is 0.15 (15%). The rate of return of Company 2 will be (Round to four decimal places as needed.) (f) If the actual rate...

The accompanying data represent the annual rates of return of two​ companies' stock for the past 12 years. Complete parts​ (e) through​ (k).

Year Rate of Return of Company 1 Rate of Return of Company 2
1996 0.203 0.398
1997 0.310 0.510
1998 0.267 0.410
1999 0.195 0.436
2000 -0.101 -0.060
2001 -0.130 -0.151
2002 -0.234 -0.357
2003 0.264 0.328
2004 0.090 0.207
2005 0.030 -0.014
2006 0.128 0.093
2007 -0.035 0.027

Extracted text: (e) Predict the rate of return of Company 2 if the rate of return of Company 1 is 0.15 (15%). The rate of return of Company 2 will be (Round to four decimal places as needed.) (f) If the actual rate of return for Company 2 was 20.0% when the rate of return of Company 1 was 15%, was the performance of Company 2 above or below average among all years the returns of Company 1 were 15%? Above average Below average (g) Interpret the slope. Choose the correct answer below. O A. For each percentage point increase in the rate of return for Company 1, the rate of return of Company 2 will decrease by about 0.03 percentage points, on average. O B. For each percentage point increase in the rate of return for Company 1, the rate of return of Company 2 will increase by about 1.48 percentage points, on average. O C. For each percentage point increase in the rate of return for Company 1, the rate of return of Company 2 will increase by about 0.03 percentage points, on average. O D. For each percentage point increase in the rate of return for Company 1, the rate of return of Company 2 will decrease by about 1.48 percentage points, on average.


Extracted text: (h) Interpret the y-intercept. Choose the correct answer below. O A. The y-intercept indicates that the rate of return for Company 1 will be 1.4787 when there is no change to Company 2. B. The y-intercept indicates that the rate of return for Company 2 will be 1.4787 when there is no change to Company 1. OC. The y-intercept indicates that the rate of return for Company 1 will be 0.0306 when there is no change to Company 2. O D. The y-intercept indicates that the rate of return for Company 2 will be 0.0306 when there is no change to Company 1. (1) What proportion of the variability in the rate of return of Company 2 is explained by the variability in the rate of return of Company 1? The proportion of the variability is%. (Round to one decimal place as needed.) G) Plot residuals against the rate of return of Company 1. Choose the correct graph below. O A. В. Oc. AResidual AResidual 0.15- AResidual 0.25- 0.20- 0.00- 0.10- 0.00- -0.25- -0.15- 0.00- -0.3 RR of Company 1 o.0 0.3 -0.3 0.3 -0.3 0.3 RR of Company 1 RR of Company 1 Does the residual plot confirm that the relation between the rate of return of Company 1 and Company 2 is linear?