a small technology company started offering shares of stock to investors in 1987. at that time, the price of…

a small technology company started offering shares of stock to investors in 1987. at that time, the price of one share of stock was $0.39. since then, the company has experienced rapid growth. twenty - two years later, the price of a single share of stock has risen to over $110. the scatterplot shows the number of years since the initial stock offering in 1987 and the price of the stock. stock prices vs. years since 1987 based on the scatterplot and residual plot, is a linear model appropriate for the growth of stock price? a linear model is appropriate because the regression line fits the scatterplot well. a linear model is not appropriate because the residual plot is centered about zero. a linear model is not appropriate because the residual plot shows a clear pattern. a linear model is not appropriate because the scatterplot shows a clear pattern.

a small technology company started offering shares of stock to investors in 1987. at that time, the price of one share of stock was $0.39. since then, the company has experienced rapid growth. twenty - two years later, the price of a single share of stock has risen to over $110. the scatterplot shows the number of years since the initial stock offering in 1987 and the price of the stock. stock prices vs. years since 1987 based on the scatterplot and residual plot, is a linear model appropriate for the growth of stock price? a linear model is appropriate because the regression line fits the scatterplot well. a linear model is not appropriate because the residual plot is centered about zero. a linear model is not appropriate because the residual plot shows a clear pattern. a linear model is not appropriate because the scatterplot shows a clear pattern.

Answer

Brief Explanations:

A linear model is appropriate when the residual plot has no discernible pattern. If the residual plot shows a clear pattern, it indicates that a linear model is not capturing all the relationships in the data. Here, the presence of a pattern in the residual plot means a linear model is not appropriate.

Answer:

A linear model is not appropriate because the residual plot shows a clear pattern.