Question #112 - Reading 1 Multiple Regression

Reading: Reading 1 Multiple Regression

PDF File: Reading 1 Multiple Regression.pdf

Page: 56

Status: Unattempted

Correct Answer: B

Shared Context

- The predicted price of a house that has 2,000 square feet of space and 4 bedrooms is closest to: A) $114,000. B) $256,000. C) $185,000.

Question

The conclusion from the hypothesis test of H0: b1 = b2 = 0, is that the null hypothesis should:

Answer Choices:

A. not be rejected as the calculated F of 40.73 is greater than the critical value of 3.29

B. be rejected as the calculated F of 40.73 is greater than the critical value of 3.33

C. be rejected as the calculated F of 40.73 is greater than the critical value of 3.29

Explanation

We can reject the null hypothesis that coefficients of both independent variables equal 0. The F value for comparison is F2,29 = 3.33. The degrees of freedom in the numerator is 2; equal to the number of independent variables. Degrees of freedom for the denominator is 32 − (2+1) = 29. The critical value of the F-test needed to reject the null hypothesis is thus 3.33. The actual value of the F-test statistic is 40.73, so the null hypothesis should be rejected, as the calculated F of 40.73 is greater than the critical value of 3.33.

Actions

Practice Flashcards