The editors of a national automotive magazine recently studied 30 different automobiles sold in the United States with the intent of seeing whether they could develop a multiple regression model to explain the variation in highway miles per gallon. A number of different independent variables were collected. The following regression output is the result of using a forward selection stepwise regression approach. Based on the regression output, which of the following statements is true?
A) There is a multicollinearity problem since the standard error of the estimate actually increased when the second variable, "Price as Tested," entered the model.
B) The R-square value increased when the second variable entered the model.
C) Neither variable in the model is statistically significant at the alpha = 0.05 level.
D) The reason that only two variables entered the model is due to the small sample size used in this study.

Question

The editors of a national automotive magazine recently studied 30 different automobiles sold in the United States with the intent of seeing whether they could develop a multiple regression model to explain the variation in highway miles per gallon. A number of different independent variables were collected. The following regression output is the result of using a forward selection stepwise regression approach.  Based on the regression output, which of the following statements is true?
A) There is a multicollinearity problem since the standard error of the estimate actually increased when the second variable, "Price as Tested," entered the model. 
B) The R-square value increased when the second variable entered the model. 
C) Neither variable in the model is statistically significant at the alpha = 0.05 level. 
D) The reason that only two variables entered the model is due to the small sample size used in this study.

Quizplus · Accepted Answer

The Answer of The editors of a national automotive magazine recently studied 30 different automobiles sold in the United States with the intent of seeing whether they could develop a multiple regression model to explain the variation in highway miles per gallon. A number of different independent variables were collected. The following regression output is the result of using a forward selection stepwise regression approach.  Based on the regression output, which of the following statements is true?
A) There is a multicollinearity problem since the standard error of the estimate actually increased when the second variable, "Price as Tested," entered the model. 
B) The R-square value increased when the second variable entered the model. 
C) Neither variable in the model is statistically significant at the alpha = 0.05 level. 
D) The reason that only two variables entered the model is due to the small sample size used in this study.

The Editors of a National Automotive Magazine Recently Studied 30