Question #40 - Reading 1 Multiple Regression

Reading: Reading 1 Multiple Regression

PDF File: Reading 1 Multiple Regression.pdf

Page: 18

Status: Unattempted

Correct Answer: B

Shared Context

- Regarding Brent's Statements 1 and 2: A) Both statements are correct. B) Only Statement 2 is correct. C) Only Statement 1 is correct.

Question

Brent would like to further investigate whether at least one of the independent variables can explain a significant portion of the variation of the dependent variable. Which of the following methods would be best for Brent to use?

Answer Choices:

A. The F-statistic

B. The multiple coefficient of determination

C. An ANOVA table. In preparing an analysis of HB Inc., Jack Stumper is asked to look at the company's sales in relation to broad based economic indicators. Stumper's analysis indicates that HB's monthly sales are related to changes in housing starts (H) and changes in the mortgage interest rate (M). The analysis covers the past ten years for these variables. The regression equation is: S = 1.76 + 0.23H - 0.08M Number of observations: 123 Unadjusted R2: 0.77 F statistic: 9.80 Durbin Watson statistic 0.50 p-value of Housing Starts 0.017 p=value of Mortgage Rates 0.033 Variable Descriptions S = HB Sales (in thousands) H = housing starts (in thousands) M = mortgage interest rate (in percent) November 20x6 Actual Data HB's monthly sales: $55,000

Explanation

To determine whether at least one of the coefficients is statistically significant, the calculated F-statistic is compared with the critical F-value at the appropriate level of significance. (Module 1.1, LOS 1.b) In preparing an analysis of HB Inc., Jack Stumper is asked to look at the company's sales in relation to broad based economic indicators. Stumper's analysis indicates that HB's monthly sales are related to changes in housing starts (H) and changes in the mortgage interest rate (M). The analysis covers the past ten years for these variables. The regression equation is: S = 1.76 + 0.23H - 0.08M Number of observations: 123 Unadjusted R2: 0.77 F statistic: 9.80 Durbin Watson statistic 0.50 p-value of Housing Starts 0.017 p=value of Mortgage Rates 0.033 Variable Descriptions S = HB Sales (in thousands) H = housing starts (in thousands) M = mortgage interest rate (in percent) November 20x6 Actual Data HB's monthly sales: $55,000 Housing starts: 150,000 Mortgage interest rate (%): 7.5

Actions

Practice Flashcards