Based on the output below from regression analysis performed to develop a model for predicting a firm's Price-Earnings Ratio (PE) based on Growth Rate, Profit Margin,
And whether or not the firm is Green (1 = Yes, 0 = No), we can conclude (α = .05)
That The regression equation is
$\mathrm { PE } = 8.04 + 0.757$ Growth Rate $+ 0.0516$ Profit Margin $+ 2.09$ Green?
$\begin{array} { l r r r r } \text { Predictor } & \text { Coef } & \text { SE Coef } & \text { T } & \text { P } \ \text { Constant } & 8.043 & 1.570 & 5.12 & 0.000 \ \text { Growth Rate } & 0.7569 & 0.1355 & 5.59 & 0.000 \ \text { Profit Margin } & 0.05162 & 0.03239 & 1.59 & 0.139 \ \text { Green? } & 2.0900 & 0.7945 & 2.63 & 0.023 \ \mathrm {~S} = 1.12583 & \mathrm { R } - \mathrm { Sq } = 87.8 \end{array}$
A) Growth Rate is not a significant variable in predicting a firm's PE ratio.
B) Profit Margin is a significant variable in predicting a firm's PE ratio.
C) The regression coefficient associated with Growth Rate is not significantly
Different from zero.
D) Whether or not a firm is Green is significant in predicting its PE ratio.
E) The regression coefficient associated with Profit Margin is significantly different
From zero.

Question

Quizplus · Accepted Answer

The significance of a variable in regression analysis is determined by its p-value. A p-value less than the alpha level (α = .05) indicates that the variable is significant. In this output, the p-value for "Green?" is 0.023, which is less than 0.05, making it significant in predicting a firm's PE ratio. The p-values for Growth Rate and Profit Margin are 0.000 and 0.139, respectively, indicating that Growth Rate is also significant (but this was not an option to affirm), while Profit Margin is not significant in the model.

Based on the Output Below from Regression Analysis Performed to Develop