They have gathered a sample of 1000 people for each of the categories and came up with an average height in that group.ī = (6 * 49,553) – (850 *350) / 6 * 120,834 – (850) 2 Example #3ĪBC laboratory is conducting research on height and weight and wanted to know if there is any relationship like as the height increases, the weight will also increase. Hence the regression line Y = 4.28 – 0.04 * XĪnalysis: It appears State bank of India is indeed following the rule of linking its saving rate to the repo rate as there is some slope value that signals a relationship between the repo rate and the bank’s saving account rate. Let’s now input the values in the formula to arrive at the figure. read more rate as an independent variable, i.e., X, and treating Bank’s rate as the dependent variable as Y. Such an agreement can happen between multiple parties into three types- specialized delivery, held-in-custody repo and third-party repo. Treating the Repo Repo A repurchase agreement or repo is a short-term borrowing for individuals who deal in government securities. Using the formula discussed above, we can do the calculation of linear regression in excel. Use regression formula and determine whether Bank’s rate changed as and when the Repo rate was changed? The auditor of state bank has approached you to conduct an analysis and provide a presentation on the same in the next meeting. Following is the summary of the Repo rate and Bank’s savings account interest rate that prevailed in those months are given below. State bank of India recently established a new policy of linking savings account interest rate to Repo rate, and the auditor of the state bank of India wants to conduct an independent analysis on the decisions taken by the bank regarding interest rate changes whether those have been changes whenever there have been changes in the Repo rate. Hence the regression line Y = 0.52 + 1.20 * X Example #2 Let’s now input the values in the regression formula to get regression. “a” in the formula is the intercept which is that value which will remain fixed irrespective of changes in the independent variable and the term ‘b’ in the formula is the slope which signifies how much variable is the dependent variable upon independent variable. read more if X, an independent variable, change by a certain value. The objective of the FV equation is to determine the future value of a prospective investment and whether the returns yield sufficient returns to factor in the time value of money. Y is the dependent variable in the formula which one is trying to predict what will be the future value Future Value The Future Value (FV) formula is a financial terminology used to calculate cash flow value at a futuristic date compared to the original receipt. Linear analysis is one type of regression analysis. Regression analysis, as mentioned earlier, is majorly used to find equations that will fit the data. Relevance and Uses of Regression Formula.read more is a powerful tool as it is used to assess the strength of the relationship between two or more variables, and then it would be used for modeling the relationship between those variables in the future. It is widely used in investing & financing sectors to improve the products & services further. Regression Regression Regression Analysis is a statistical approach for evaluating the relationship between 1 dependent variable & 1 or more independent variables. Regression analysis widely used statistical methods to estimate the relationships between one or more independent variables and dependent variables.
GIVEN THE ESTIMATED SIMPLE LINEAR REGRESSION EQUATION PLUS
Regression formula is used to assess the relationship between dependent and independent variable and find out how it affects the dependent variable on the change of independent variable and represented by equation Y is equal to aX plus b where Y is the dependent variable, a is the slope of regression equation, x is the independent variable and b is constant.