Question

Investors are becoming more and amore concerned about the securities fraud, especially involving initial public offering. During the six-year period, the number of the number of federal securities-fraud class action suits has continued to increase: Year Suits 1996 110 1997 178 1998 236 1999 205 2000 211 2001 282 What is the slope of the best fitting line? a.26,514b.26.514 c.-52785 d.52785

Answer 1

Answer:

Correct option is (a). 26.514

Step-by-step explanation:

The formula to compute the slope of regression line from raw data is:

$Slope=\frac{n\sum XY-\sum X\sum Y}{n\sum X^{2}-(\sum X)^{2}}$

Compute the values of ∑ XY, ∑ X , ∑ Y and ∑ X² as shown in the table.

The values are:

$\sum X=11991\\\sum Y =1222\\\sum X^{2}=23964031\\\sum XY = 2442631$

Compute the slope of the best fitting line as follows:

$Slope=\frac{n\sum XY-\sum X\sum Y}{n\sum X^{2}-(\sum X)^{2}}\\=\frac{(6\times2442631)-(11991\times1222)}{(6\times23964031)-(11991)^{2}} \\=26.51428\\\approx26.514$

Thus, the slope of the best fitting line is 26.514.

The correct option is (a).