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DUALMBAPRACTICE4

THENEXTQUESTIONSAREBASEDONTHEFOLLOWINGINFORMATION:
Themanagerofaused-cardealershipisveryinterestedintheresalepriceofusedcars.Themanagerfeelsthattheageof
thecarisimportantindeterminingtheresalevalue.Hecollectsdataontheageandresalevalueof15carsandrunsa
regressionanalysiswiththevalueofthecar(inthousandsofdollars)asthedependentvariableandtheageofthecar(in
years)astheindependentvariable.Unfortunately,hespilledhiscoffeeontheprintoutandlostsomeoftheresults,
identifiedbyAthroughF.Thepartialresultsleftaredisplayedbelow.

1) Whatisthevalueof*A*?
A) 0.67

B) 0.442

C) 0.195

D) 0.805

B) 2.58

C) 3.95

D) 3.75

B) 162.42

C) 182.99

D) 140.03

B) 3.06

C) 22.96

D) 9.35

B) -0.278

C) -1.136

D) 1.136

C) 0.025

D) 0.05

2) Whatisthevalueof*B*?
A) 6.67
3) Whatisthevalueof*D*?
A) 172.25
4) Whatisthevalueof*E*?
A) 9.82
5) Whatisthevalueof*F*?
A) 0.278

6) Whatistheapproximatevalueof*G*?
A) 0.10

B) 0.01

THENEXTQUESTIONSAREBASEDONTHEFOLLOWINGINFORMATION:
Supposewehavethefollowinginformationfromasimpleregression:b0 =117.4,b1 =-14.39,sb0 =0.18,sb1 =0.18,n=300,

x =4.3,SST=17045,andSSE=12053.
7) Whatisthecoefficientofdetermination?
A) 0.4671

B) 0.5408

C) 0.2929

D) 0.7122

B) 0.6834

C) 0.5412

D) -0.5412

B) 103.08

C) 55.52

D) 179.23

8) Whatisthecorrelationcoefficient?
A) -0.6834
9) WhatisthesamplemeanofY?
A) 74.37

10) Whichofthefollowingwouldmostlikelyrepresenta95%confidenceintervalfortheestimateof Y,givenX =


X?
A) 55.5240.4

B) 55.52 6.21

C) 55.52 18.63

D) 55.52 12.42

THENEXTQUESTIONSAREBASEDONTHEFOLLOWINGINFORMATION:
Asalesmanagerisinterestedindeterminingtherelationshipbetweentheamountspentonadvertisingandtotalsales.The
managercollectsdataforthepast24monthsandrunsaregressionofsalesonadvertisingexpenditures.Theresultsare
presentedbelowbut,unfortunately,somevaluesidentifiedbyasterisksaremissing.

11) Whatarethedegreesoffreedomforresiduals?
A) 22

B) 24

C) 23

D) 21

12) Whatisthevalueofmeansquareerror?
A) 1678.9

B) 1,554.2

C) 1,407.3

D) 1,493.6

C) 21

D) 23

C) 10,130.5

D) 11,759.9

13) Whatarethetotaldegreesoffreedom?
A) 22

B) 24

14) Whatisthevalueofresidualsumofsquares?
A) 10,945.2

B) 36,935.8

THENEXTQUESTIONSAREBASEDONTHEFOLLOWINGINFORMATION:
Theresultsofaregressionanalysisarelistedbelowbut,unfortunately,somevaluesasidentifiedbyasterisksaremissing.

15) Calculatethecoefficientofdetermination.
16) Determinethemeansquareerror.
17) Determinethestandarderrorofestimate.
18) Calculatetheregressionsumofsquares.
19) WhatisthevalueoftheteststatisticF?
20) Calculatetheslopecoefficient.
21) Whatisthep-valueassociatedwiththeindependentvariableage?
3

THENEXTQUESTIONSAREBASEDONTHEFOLLOWINGINFORMATION:
Supposethatyouareinterestedintherelationshipbetweenthereturnrateonastockin2005,comparedtothereturnratein
2004.Youbelievethatthereturnratesinbothyearsarepositivelycorrelated.Asampleof15stocksyieldsthefollowing
regressionresults:b0 =5.3,b1 =1.04,sb0 =1.79,sb1 =0.2163,R2 =0.64,andMSE=35.4.
22) Howwouldyouslopecoefficientb1 ?
23) Whatistheleastsquaresregressionline?
24) WhatisthepredictedvalueofYwhenX= 5?
25) Calculatetheerrorsumofsquares.
26) Calculatethetotalsumofsquares.
27) Calculatetheregressionsumofsquares.
28) Whatisthecorrelationcoefficientforthestockreturnsofthetwoyears?Whatsigndoesithave?Why?
29) Whataretheappropriatenullandalternativehypotheses?
30) TestH0 :1 =0vs.H1 :1 >0at=0.025.

AnswerKey
Testname:DUALMBAPRACTICE4

1) C
2) D
3) C
4) C
5) C
6) A
7) C
8) D
9) C
10) D
11) A
12) A
13) D
14) B
15) R2 =(MultipleR)2 =(0.187)2 =0.03497
16) MSE=SSE/(n-2)=3609911959.868/113 = 31946123.53
17) se= MSE= 31946123.53=5652.09
18) Forsimplelinearregression,SSR=MSR=130433116.219
19) F=MSR/MSE=130433116.219/31946123.53 = 4.0829
20) t=b1 /sb1 2.021=b1 /34.625b1 =69.977
21) p-value=significanceFinANOVAtable= 0.046
22) Forevery1%increaseinrateofreturnin2004,wewouldexpectthereturnratein2005toincrease,onaverage,by
1.04%.
^

23) y =5.3+1.04X
^

24) y =10.5
SSE SSE
=
SSE=460.2
n-2 13
460.2
SSE
=1-
SST=460.2/0.36=1278.33
26) R2 =0.64=1SST
SST

25) MSE=35.4=

27) SSR=SST-SSE=127.33-460.2=818.13
28) r= R2 =+ 0.64=0.80.Ithasapositivesignsinceb1 =1.04ispositive.
29) H0 :=0andH1 :>0
30) Theteststatistict=(b1 -1 )/sb1 =1.04/0.2163= 4.808. .Since,tn-2, = t13,0.025 = 2.16,werejectH0 at=0.025and

concludethatthereisapositivelinearrelationshipbetweenthestockreturnsin2004and2005.