Overview
Based on the data collected, the financial firm aims to analyze which investment strategy, Strategy A or Strategy B, yields better returns for their clients' portfolios. Management has assigned you to be the analyst for this project. You are expected to submit a report that contains the results (with detailed computations), interpretations, and suggestions. You need to include the following:
- Find the correlation coefficients between the initial investment amount and the total return for each strategy.
- Obtain the linear regression equation for each strategy using the simple linear regression model.
- Plot scatter diagrams to see the effect of each strategy, including the regression line, and interpret the results.
- Find the expected total return if the initial investment amount is 38,500 OMR at each strategy.
- Find the required initial investment amount for a client to reach 46,200 OMR in total returns from each strategy.
- As an analyst at this financial firm, which strategy is more effective in increasing total return? With proper justification.