SCENARIO 18-5 You worked as an intern at We Always Win Car Insurance Company last summer.You notice that individual car insurance premiums depend very much on the age of the individual, the number of traffic tickets received by the individual, and the population density of the city in which the individual lives.You performed a regression analysis in EXCEL and obtained the following information: Regression Analysis
-Referring to Scenario 18-5, to test the significance of the multiple regression model, the null hypothesis should be rejected when allowing for 1% probability of committing a type I error.

Question

SCENARIO 18-5 You worked as an intern at We Always Win Car Insurance Company last summer.You notice that individual car insurance premiums depend very much on the age of the individual, the number of traffic tickets received by the individual, and the population density of the city in which the individual lives.You performed a regression analysis in EXCEL and obtained the following information: Regression Analysis 
-Referring to Scenario 18-5, to test the significance of the multiple regression model, the null hypothesis should be rejected when allowing for 1% probability of committing a type I error.

Quizplus · Accepted Answer

To test the significance of the multiple regression model, we use the F-test. If the calculated F-value is greater than the critical F-value at the chosen level of significance (in this case 1%), then we reject the null hypothesis, indicating that the regression model is significant. Therefore, the statement is true. To test the significance of the multiple regression model, we use the F-test. If the calculated F-value is greater than the critical F-value at the chosen level of significance, we reject the null hypothesis. Therefore, if we allow for a 1% probability of committing a Type I error, the null hypothesis should be rejected if the calculated F-value is greater than the critical F-value at the 1% level of significance.

SCENARIO 18-5 You Worked as an Intern at We Always