Exhibit 15-3 In a regression model involving 30 observations, the following estimated regression equation was obtained: For this model SSR = 700 and SSE = 100. -Refer to Exhibit 15-3. The conclusion is that the A)model is not significant B)model is significant C)slope of X₁ is significant D)slope of X₂ is significant

Question

Quizplus · Accepted Answer

To test if the model is significant, we need to perform an F-test:
F = (SSR/1) / (SSE/(n-2-p)) 
where p is the number of independent variables (excluding the constant). 
In this case, p = 1 since there is only one independent variable. 
Substitute the given values:
F = (700/1) / (100/(30-2-1)) 
F = 23.33 
The F-statistic for a regression model with 1 independent variable at 5% level of significance is 4.1709. Since 23.33 > 4.1709, we reject the null hypothesis and conclude that the model is significant. Therefore, the answer is B.

Exhibit 15-3 In a Regression Model Involving 30 Observations, the Following Estimated