Explanation:
1. we have b1 = 1.04 which is positive. we say that the return I. 2009 is positively correlated with the return in 2010.
2. Y = b0 + b1X
Y = 5.3 + 1.04X
3. If x = 5
Y = 5.3 + 1.04(5)
Y = 10.5
4. SSE = mse x (n-2)
n = 15, mse = 35.4
SSE = 35.4 x(15-2)
= 35.4 x 13
= 460.2
5. We are to find SST here
R² = SSR/ SSR + SSE
R² = 0.64
SSE = 460.2
0.64 = SSR/SSR+460.2
Cross multiply
0.64(SSR + 460.2) = SSR
0.64ssr + 294.528 = SSR
Collect like terms
294.528 = SSR - 0.64SSR
294.528 = 0.36SSR
SSR = 294.528/0.36
SSR = 818.13
SST = SSR + SSE
= 818.13 + 460.2
= 1276.53
6. The SSR has been calculated to be 818.13