Question 1

The accompanying table shows the regression results when estimating . a.Specify the competing hypotheses to determine whether the explanatory variables are jointly significant. B)At the 5% significance level,are the explanatory variables jointly significant? Explain. C)At the 5% significance level,is x₂ significant in explaining y? Explain. D)At the 5% significance level,is the slope coefficient attached to x₃ different from -2?

Accepted Answer

The answer of The accompanying table shows the regression results...

Question 2

In a multiple regression based on 30 observations,the following information is provided: with .Also, evaluated at and is 2.8. A)Construct a 95% confidence interval for if x₁ equals 40 and x₂ equals 30. B)Construct a 95% prediction interval for y if x₁ equals 40 and x₂ equals 30. C)Which interval is narrower? Explain.

Accepted Answer

The answer of In a multiple regression based on 30...

Question 3

Assume you ran a multiple regression to gain a better understanding of the relationship between lumber sales,housing starts,and commercial construction.The regression uses Lumber Sales (in $100,000s)as the response variable with Housing Starts (in 1000s)and Commercial Construction (in 1000s)as the explanatory variables.The results of the regression are:  a.At the 5% significance level,are the explanatory variables jointly significant in explaining Lumber Sales? Explain.
B)At the 5% significance level,is Commercial Construction significant in explaining Lumber Sales? Explain.
C)At the 5% significance level,can you conclude that the slope coefficient attached to Housing Starts differs from 1? Explain.

Accepted Answer

The answer of Assume you ran a multiple regression to...

Question 4

An analyst examines the effect that various variables have on crop yield.He estimates where y is the average yield in bushels per acre,x₁ is the amount of summer rainfall,x₂ is the average daily use in machine hours of tractors on the farm,and x₃ is the amount of fertilizer used per acre.The results of the regression are: a.At the 10% significance level,are the explanatory variables jointly significant in explaining crop yield? Explain. B)At the 10% significance level,is fertilizer significant in explaining crop yield? Explain. C)At the 10% significance level,can you conclude that the slope coefficient attached to rain differs from 9? Explain.

Accepted Answer

The answer of An analyst examines the effect that various...

Question 5

A simple linear regression,  ,is estimated using cross-sectional data from 10 firms.The resulting residuals e,along with the values of the explanatory variable Advertising (x,in $100s),are shown in the accompanying table.  a.Graph the residuals e against Advertising (x)and look for any discernible pattern.
B)Which assumption is being violated? Discuss its consequences and suggest a possible remedy.

Accepted Answer

The answer of A simple linear regression,  ,is estimated...

Question 6

In a simple linear regression based on 30 observations,the following information is provided:  and  .Also,  evaluated at  is 1.3.
A)Construct a 95% confidence interval for E(y)if x = 20.
B)Construct a 95% prediction interval for y if x = 20.

Accepted Answer

The answer of In a simple linear regression based on...

Question 7

A manager at a local bank analyzed the relationship between monthly salary (y,in $)and length of service (x,measured in months)for 30 employees.The following table summarizes a portion of the regression results:  a.Specify the competing hypotheses to determine whether Service is significant in explaining Salary.
B)At the 5% significance level,is Service significant? Explain.

Accepted Answer

The answer of A manager at a local bank analyzed...

Question 8

Consider the following regression results based on 30 observations. a.Formulate the hypotheses to determine whether the influences of x₂ and x₃ differ in explaining y. B)Calculate the value of the test statistic. C)At the 5% significance level,find the critical value(s). D)What is your conclusion to the test?

Accepted Answer

The answer of Consider the following regression results based on...

Question 9

In a multiple regression based on 30 observations,the following information is provided: with s_e = 16.Also,when ,and . A)Construct a 90% confidence interval for E(y)if ,and . B)Construct a 90% prediction interval for y if ,and . C)Which interval is narrower? Explain.

Accepted Answer

The answer of In a multiple regression based on 30...

Question 10

A researcher analyzes the factors that may influence the poverty rate and estimates the following model: , where y is the poverty rate (y,in %),x₁ is the percent of the population with at least a high school education,x₂ is the median income ( in $1000s),and x₃ is the mortality rate (per 1,000 residents).The researcher would like to construct interval estimates for y when x₁,x₂,and x₃ equal 85%,$50,000,and 10,respectively.The researcher estimates a modified model where poverty rate is the response variable and the explanatory variables are now defined as ,and .A portion of the regression results is shown in the accompanying table. a.According to the modified model,what is the point estimate for the poverty rate when x₁,x₂,and x₃ equal 85%,$50,000,and 10,respectively. B)According to the modified model,what is a 95% confidence interval for the expected poverty rate when x₁,x₂,and x₃ equal 85%,$50,000,and 10,respectively? (Note that . ) C)According to the modified model,what is a 95% prediction interval for the poverty rate when x₁,x₂,and x₃ equal 85%,$50,000,and 10,respectively? (Note that . )

Accepted Answer

The answer of A researcher analyzes the factors that may...

Question 11

Pfizer Inc.is the world's largest research-based pharmaceutical company.Monthly data for Pfizer's risk-adjusted return and the risk-adjusted market return are collected for a five-year period (n = 60).The accompanying table shows the regression results when estimating the CAPM model for Pfizer's return.  a.At the 5% significance level,is the beta coefficient less than one? Show the relevant steps of the appropriate hypothesis test.
B)At the 5% significance level,are there abnormal returns? Show the relevant steps of the appropriate hypothesis test.

Accepted Answer

The answer of Pfizer Inc.is the world's largest research-based pharmaceutical...

Question 12

A sociologist estimates the following regression relating Poverty (y)to Education (x₁): In an attempt to improve the results,he adds two more explanatory variables: Median Income (x₂,in $1,000s)and the Mortality Rate (x₃,per 1,000 residents).The estimated regression equation is: a.Formulate the hypotheses to determine whether Median Income and the Mortality Rate are jointly significant in explaining Poverty. B)Calculate the value of the test statistic. C)At the 5% significance level,find the approximate value of the critical value(s). D)What is the conclusion to the test?

Accepted Answer

The answer of A sociologist estimates the following regression relating...

Question 13

A simple linear regression,  ,is estimated using time-series data over the last 10 years.The residuals e,and the time variable t are shown in the accompanying table.  a.Graph the residuals e against time and look for any discernible pattern.
B)Which assumption is being violated? Discuss its consequences and suggest a possible remedy.

Accepted Answer

The answer of A simple linear regression,  ,is estimated...

Question 14

A marketing manager examines the relationship between the attendance at amusement parks and the price of admission.He estimates the following model:  ,
where Attendance is the average daily number of people who attend an amusement park in July (in 1000s)and Price is the price of admission.The marketing manager would like to construct interval estimates for Attendance when Price equals $80.The researcher estimates a modified model where Attendance is the response variable and the Price is now defined as  .A portion of the regression results is shown in the accompanying table.  a.According to the modified model,what is the point estimate for Attendance when Price equals $80?
B)According to the modified model,what is a 95% confidence interval for Attendance when Price equals $80? (Note that  . )
C)According to the modified model,what is a 95% prediction interval for Attendance when Price equals $80? (Note that  . )

Accepted Answer

The answer of A marketing manager examines the relationship between...

Question 15

A sociologist studies the relationship between a district's average score on a standardized test for 10^th grade students (y),the average school expenditures per student (x₁in $1000s),and an index of socioeconomic status of the district (x₂).The results of the regression are: He would like to determine whether the influence of expenditures on test scores differs from the influence of the index on test scores,or .The results of the restricted model for this test are: a.Formulate the hypotheses to determine whether Expenditures and Index Rate have the same influence on Scores. B)Calculate the value of the test statistic. C)At the 5% significance level,find the critical value(s). D)What is the conclusion to the test?

Accepted Answer

The answer of A sociologist studies the relationship between a...

Question 16

Consider the following regression results based on 30 observations. Notes: Parameter estimates are in the main body of the table with the p-values in parentheses;* represents significance at 5% level.The last row presents the error sum of squares. A)Formulate the hypotheses to determine whether x₂ and x₃ are jointly significant in explaining y. B)Define the restricted and the unrestricted models needed to conduct the test. C)Calculate the value of the test statistic. D)At the 5% significance level,find the critical value(s). E)What is your conclusion to the test?

Accepted Answer

The answer of Consider the following regression results based on...

Question 17

An investment analyst wants to examine the relationship between a mutual fund's return,its turnover rate and its expense ratio.She randomly selects 10 mutual funds and estimates: Return = β₀ + β₁ Turnover + β₂ Expense + ε,where Return is the average five-year return (in %),Turnover is the annual holdings turnover (in %),Expense is the annual expense ratio (in %),and ε is the random error component.A portion of the regression results is shown in the accompanying table.

Accepted Answer

The answer of An investment analyst wants to examine the...

Quiz 15: Inference With Regression Models

In a simple linear regression based on 30 observations,the following information is provided: and .Also, evaluated at is 1.3. A)Construct a 95% confidence interval for E(y)if x = 20. B)Construct a 95% prediction interval for y if x = 20.

In a multiple regression based on 30 observations,the following information is provided: with se = 16.Also,when ,and . A)Construct a 90% confidence interval for E(y)if ,and . B)Construct a 90% prediction interval for y if ,and . C)Which interval is narrower? Explain.

In a multiple regression based on 30 observations,the following information is provided: with s_e = 16.Also,when ,and . A)Construct a 90% confidence interval for E(y)if ,and . B)Construct a 90% prediction interval for y if ,and . C)Which interval is narrower? Explain.