A study has recently been conducted by a major computer magazine publisher in which the objective was to develop a multiple regression model to explain the variation in price of personal computers. Three quantitative independent variables were used along with one qualitative variable. The qualitative variable was coded 1 if the computer included a monitor, 0 otherwise. The following computer printout shows the final output. Based on this information, and with a 0.05 level of significance, which of the following conclusions can be justified?
A) Knowing whether the computer comes with a monitor or not is a significant factor in explaining the variation in price of the computer.
B) There are substantial multicollinearity effects in this regression model.
C) The only significant variable in the model at the .05 level of significance is Hard Drive Capacity.
D) Removing the Monitor dummy variable would reduce the standard error of the estimate considerably.

Question

A study has recently been conducted by a major computer magazine publisher in which the objective was to develop a multiple regression model to explain the variation in price of personal computers. Three quantitative independent variables were used along with one qualitative variable. The qualitative variable was coded 1 if the computer included a monitor, 0 otherwise. The following computer printout shows the final output.  Based on this information, and with a 0.05 level of significance, which of the following conclusions can be justified?
A) Knowing whether the computer comes with a monitor or not is a significant factor in explaining the variation in price of the computer. 
B) There are substantial multicollinearity effects in this regression model. 
C) The only significant variable in the model at the .05 level of significance is Hard Drive Capacity. 
D) Removing the Monitor dummy variable would reduce the standard error of the estimate considerably.

Quizplus · Accepted Answer

The Answer of A study has recently been conducted by a major computer magazine publisher in which the objective was to develop a multiple regression model to explain the variation in price of personal computers. Three quantitative independent variables were used along with one qualitative variable. The qualitative variable was coded 1 if the computer included a monitor, 0 otherwise. The following computer printout shows the final output.  Based on this information, and with a 0.05 level of significance, which of the following conclusions can be justified?
A) Knowing whether the computer comes with a monitor or not is a significant factor in explaining the variation in price of the computer. 
B) There are substantial multicollinearity effects in this regression model. 
C) The only significant variable in the model at the .05 level of significance is Hard Drive Capacity. 
D) Removing the Monitor dummy variable would reduce the standard error of the estimate considerably.

A Study Has Recently Been Conducted by a Major Computer