Practice Test 2

Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. A regression analysis between sales (Y in $1000) and advertising (X in dollars) resulted in the following equation Y-hat !0"000 # $ X %he above equation i&'lies that an a. in(rease of $$ in advertising is asso(iated with an in(rease of $$"000 in sales b. in(rease of $1 in advertising is asso(iated with an in(rease of $$ in sales (. in(rease of $1 in advertising is asso(iated with an in(rease of $!$"000 in sales d. in(rease of $1 in advertising is asso(iated with an in(rease of $$"000 in sales A 'ro(edure used for finding the equation of a straight line whi(h 'rovides the best a''ro*i&ation for the relationshi' between the inde'endent and de'endent variables is the a. (orrelation analysis b. &ean squares &ethod (. least squares &ethod d. &ost squares &ethod +n si&'le linear regression analysis" whi(h of the following is not true, a. %he - test and the t test yield the sa&e results. b. %he - test and the t test &ay or &ay not yield the sa&e results. (. %he relationshi' between X and Y is re'resented by &eans of a straight line. d. %he value of - t). .orrelation analysis is used to deter&ine a. the equation of the regression line b. the strength of the relationshi' between the de'endent and the inde'endent variables (. a s'e(ifi( value of the de'endent variable for a given value of the inde'endent variable d. /one of these alternatives is (orre(t. +f the (oeffi(ient of deter&ination is equal to 1" then the (oeffi(ient of (orrelation a. &ust also be equal to 1 b. (an be either -1 or #1 (. (an be any value between -1 to #1 d. &ust be -1 +f the (oeffi(ient of deter&ination is a 'ositive value" then the regression equation a. &ust have a 'ositive slo'e b. &ust have a negative slo'e (. (ould have either a 'ositive or a negative slo'e d. &ust have a 'ositive y inter(e't +f there is a very strong (orrelation between two variables" then the (oeffi(ient of (orrelation &ust be a. &u(h larger than 1" if the (orrelation is 'ositive b. &u(h s&aller than 1" if the (orrelation is negative (. &u(h larger than one d. /one of these alternatives is (orre(t. A least squares regression line a. &ay be used to 'redi(t a value of y if the (orres'onding * value is given b. i&'lies a (ause-effe(t relationshi' between * and y (. (an only be deter&ined if a good linear relationshi' e*ists between * and y d. /one of these alternatives is (orre(t. .o&'ared to the (onfiden(e interval esti&ate for a 'arti(ular value of y (in a linear regression &odel)" the interval esti&ate for an average value of y will be a. narrower

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b. wider (. the sa&e d. /one of these alternatives is (orre(t. ____ 10. +f the (oeffi(ient of (orrelation is 0.$" the 'er(entage of variation in the de'endent variable e*'lained by the variation in the inde'endent variable a. is $05 b. is 115. (. is $5 d. (an be any 'ositive value ____ 11. +n regression analysis if the de'endent variable is &easured in dollars" the inde'endent variable a. &ust also be in dollars b. &ust be in so&e units of (urren(y (. (an be any units d. (an not be in dollars ____ 1). A regression analysis between de&and (Y in 1000 units) and 'ri(e (X in dollars) resulted in the following equation Y-hat 4 - !X

%he above equation i&'lies that if the 'ri(e is in(reased by $1" the de&and is e*'e(ted to a. in(rease by 1 units b. de(rease by ! units (. de(rease by 1"000 units d. de(rease by !"000 units Exhibit 14-1 %he following infor&ation regarding a de'endent variable (Y) and an inde'endent variable (X) is 'rovided. Y $ ! $ 1 3 667 66% 1 11 X ) 1 $ ! 0

____ 1!. 8efer to 7*hibit 1$-1. %he least squares esti&ate of the slo'e is a. 1 b. ) (. ! d. $ Exhibit 14-2 You are given the following infor&ation about y and *. y Dependent Variable 0 $ ! ) 1 x ndependent Variable 1 ) ! $ 0

____ 1$. 8efer to 7*hibit 1$-). %he least squares esti&ate of b 0 equals a. 1 b. -1 (. 1 d. 0 Exhibit 14-4 8egression analysis was a''lied between sales data (in $1"000s) and advertising data (in $100s) and the following infor&ation was obtained. y-hat 1) # 1.3 *

n 12 668 ))0 667 20 6b1 0.)13! ____ 10. 8efer to 7*hibit 1$-$. %he - statisti( (o&'uted fro& the above data is a. ! b. $0 (. $3 d. 00 Exhibit 14-! %he following infor&ation regarding a de'endent variable Y and an inde'endent variable X is 'rovided X 11 Y )$ XY 2) n $ X) Y) 3$ 12$

____ 11. 8efer to 7*hibit 1$-3. %he slo'e of the regression equation is a. 10.3 b. -10.3 (. -1.) d. 1.) ____ 12. 8efer to 7*hibit 1$-3. %he (oeffi(ient of deter&ination is a. 1.00 b. 0.41 (. 0.43 d. 0.22 Exhibit 14-" A regression and (orrelation analysis resulted in the following infor&ation regarding a de'endent variable (y) and an inde'endent variable (*). n 10 * 00 y 00 *) !30 y) !30 *y ))0

____ 13. 8efer to 7*hibit 1$-4. %he sa&'le (orrelation (oeffi(ient equals a. 0 b. -1 (. #1 d. -0.0 ____ 14. A regression &odel involved 0 inde'endent variables and 1)1 observations. %he (riti(al value of t for testing the signifi(an(e of ea(h of the inde'endent variable9s (oeffi(ients will have a. 1!1 degrees of freedo& b. 1)0 degrees of freedo& (. 1!0 degrees of freedo& d. $ degrees of freedo& ____ )0. A variable that ta:es on the values of 0 or 1 and is used to in(or'orate the effe(t of qualitative variables in a regression &odel is (alled a. an intera(tion b. a (onstant variable (. a du&&y variable d. /one of these alternatives is (orre(t. Exhibit 1#-$ +n a regression &odel involving !0 observations" the following esti&ated regression equation was obtained; Y-hat 12 # $X1 - !X) # 3X! # 3X$ 200 and 667 100.

-or this &odel 668

____ )1. 8efer to 7*hibit 10-!. %he (o&'uted - statisti( for testing the signifi(an(e of the above &odel is a. $!.20 b. 0.320 (. 00.14 d. 2.00 Exhibit 1#-# <elow you are given a 'artial =initab out'ut based on a sa&'le of )0 observations. Coe%%icient .onstant X1 X) X!
145.321 25.625 -5.720 0.823

&tandard Error
48.682 9.150 3.575 0.183

____ )). 8efer to 7*hibit 10-0. .arry out the test of signifi(an(e for the 'ara&eter 1 at the 05 level. %he null hy'othesis should be a. re>e(ted b. not re>e(ted (. revised d. /one of these alternatives is (orre(t. Exhibit 1#-' <elow you are given a 'artial (o&'uter out'ut based on a sa&'le of 11 observations. Coe%%icient .onstant X1 X)
12.924 -3.682 45.216

&tandard Error
4.425 2.630 12.560

Analysis of ?arian(e &ource o% Variation 8egression 7rror De(rees o% )reedo* &u* o% &+uares
4,853

Mean &+uare
2,426.5 485.3

____ )!. 8efer to 7*hibit 10-1. %he su& of squares due to error (667) equals a. !2.!! b. $30.! (. $"30! d. 1"!03.4 ____ )$. A regression &odel in whi(h &ore than one inde'endent variable is used to 'redi(t the de'endent variable is (alled a. a si&'le linear regression &odel b. a &ulti'le regression &odel (. an inde'endent &odel d. /one of these alternatives is (orre(t. Exhibit 1#-, A regression &odel involving $ inde'endent variables and a sa&'le of 10 'eriods resulted in the following su& of squares. 668 667 110 10

____ )0. 8efer to 7*hibit 10-2. %he (oeffi(ient of deter&ination is a. 0.!1!1 b. 0.2!!! (. 0.)20 d. 0.0 ____ )1. A regression analysis involved 1 inde'endent variables and )2 observations. %he (riti(al value of t for testing the signifi(an(e of ea(h of the inde'endent variable9s (oeffi(ients will have a. )2 degrees of freedo& b. )1 degrees of freedo& (. )1 degrees of freedo& d. )0 degrees of freedo& ____ )2. %he ti&e series (o&'onent that refle(ts variability due to natural disasters is (alled a. a trend b. seasonal (. (y(li(al d. irregular ____ )3. <elow you are given the first two values of a ti&e series. You are also given the first two values of the e*'onential s&oothing fore(ast. Ti*e Period -t. 1 ) Ti*e &eries Value - Y t . 13 )) Exponential &*oothin( )orecast - ) t. 13 13

+f the s&oothing (onstant equals .!" then the e*'onential s&oothing fore(ast for ti&e 'eriod three is a. 13 b. 14.)

(. )0 d. $0 Exhibit 1!-1 <elow you are given the first five values of a quarterly ti&e series. %he &ulti'li(ative &odel is a''ro'riate and a four-quarter &oving average will be used. Year 1 /uarter 1 ) ! $ 1 Ti*e &eries Value Y t !1 )$ 11 )0 $$

____ )4. 8efer to 7*hibit 13-1. An esti&ate of the seasonal-irregular (o&'onent for @uarter ! of Year 1 is a. .1$ b. 1.01)0 (. 0.!!! d. !0 Exhibit 1!-$ .onsider the following ti&e series. Year -t. 1 ) ! $ 0 Yi 2 0 $ ) 1

____ !0. 8efer to 7*hibit 13-!. +n whi(h ti&e 'eriod does the value of Y i rea(h Aero, a. 0.000 b. 0.131 (. 0.0! d. $.)1

Practice Test 2 0ns1er &ection

M23T P3E C45 CE 1. ). !. $. 0. 1. 2. 3. 4. 10. 11. 1). 1!. 1$. 10. 11. 12. 13. 14. )0. )1. )). )!. )$. )0. )1. )2. )3. )4. !0. B . < < < . B A A < . B A . < . < < . . A A B < < B B < A .