Multiple Regression Exam

Exam
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) In a multiple regression problem involving two independent variables, if b1 is computed to be +2.0, 1)

it means that
A) the estimated mean of Y increases by 2 units for each increase of 1 unit of X1 , without regard
to X2 .
B) the estimated mean of Y increases by 2 units for each increase of 1 unit of X1 , holding X2
constant.
C) the relationship between X1 and Y is significant.
D) the estimated mean of Y is 2 when X1 equals zero.
2) In a multiple regression model, the value of the coefficient of multiple determination 2)

A) can fall between any pair of real numbers.
B) has to fall between -1 and +1.
C) has to fall between -1 and 0.
D) has to fall between 0 and +1.
3) In a multiple regression model, which of the following is correct regarding the value of the adjusted 3)
r2 ?
A) It can be larger than 1.
B) It has to be larger than the coefficient of multiple determination.
C) It has to be positive.
D) It can be negative.
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
4) True or False: The interpretation of the slope is different in a multiple linear regression model as 4)
compared to a simple linear regression model.
5) True or False: The slopes in a multiple regression model are called net regression coefficients. 5)
6) True or False: The coefficient of multiple determination measures the proportion of the total 6)
variation in the dependent variable that is explained by the set of independent variables.
7) True or False: When an additional explanatory variable is introduced into a multiple regression 7)
model, the coefficient of multiple determination will never decrease.
8) True or False: When an explanatory variable is dropped from a multiple regression model, the 8)
adjusted r2 can increase.
9) True or False: You have just computed a regression model in which the value of coefficient of 9)
multiple determination is 0.57. To determine if this indicates that the independent variables explain
a significant portion of the variation in the dependent variable, you would perform an F test.
1
10) True or False: A regression had the following results: SST = 82.55, SSE = 29.85. It can be said that 10)
63.84% of the variation in the dependent variable is explained by the independent variables in the
regression.
11) True or False: A multiple regression is called "multiple" because it has several data points. 11)
12) True or False: A multiple regression is called "multiple" because it has several explanatory 12)
variables.
13) True or False: If you have taken into account all relevant explanatory factors, the residuals from a 13)
multiple regression model should be random.
14) True or False: From the coefficient of multiple determination, you cannot detect the strength of the 14)
relationship between Y and any individual independent variable.
An economist is interested to see how consumption for an economy (in $ billions) is influenced by gross domestic product ($
billions) and aggregate price (consumer price index). The Microsoft Excel output of this regression is partially reproduced
below.
15) When the economist used a simple linear regression model with consumption as the dependent 15)
variable and GDP as the independent variable, he obtained an r2 value of 0.971. What additional
percentage of the total variation of consumption has been explained by including aggregate prices
in the multiple regression?
A) 2.8 B) 1.1 C) 98.2 D) 11.1
16) What is the predicted consumption level for an economy with GDP equal to $4 billion and an 16)
aggregate price index of 150?
A) $1.39 billion B) $2.89 billion C) $4.75 billion D) $9.45 billion
2
17) One economy in the sample had an aggregate consumption level of $3 billion, a GDP of $3.5 billion, 17)
and an aggregate price level of 125. What is the residual for this data point?
A) -$1.33 billion B) $0.48 billion C) -$2.52 billion D) $2.52 billion
18) To test for the significance of the coefficient on aggregate price index, the value of the relevant 18)
t-statistic is
A) 0.143. B) -0.219. C) 2.365. D) -1.960.
19) To test for the significance of the coefficient on aggregate price index, the p-value is 19)
A) 0.9999. B) 0.0001. C) 0.8837. D) 0.8330.
20) To test whether aggregate price index has a negative impact on consumption, the p-value is 20)
A) 0.4165. B) 0.8330. C) 0.8837. D) 0.0001.
21) To test whether aggregate price index has a positive impact on consumption, the p-value is 21)
A) 0.5835. B) 0.8330. C) 0.0001. D) 0.4165.
A real estate builder wishes to determine how house size (House) is influenced by family income (Income) and family size
(Size). House size is measured in hundreds of square feet and income is measured in thousands of dollars. The builder
randomly selected 50 families and ran the multiple regression. Partial Microsoft Excel output is provided below:
Also SSR (X1 X2 ) = 36400.6326 and SSR (X2 X1 ) = 3297.7917
22) What fraction of the variability in house size is explained by income and size of family? 22)
A) 84.79% B) 71.89% C) 17.56% D) 70.69%
23) Which of the independent variables in the model are significant at the 5% level? 23)
A) Income only B) Income and Size
C) Size only D) None of the above
3
24) Suppose the builder wants to test whether the coefficient on Income is significantly different from 24)
0. What is the value of the relevant t-statistic?
A) 10.8668 B) 3.2708 C) 60.0864 D) -0.7630
25) When the builder used a simple linear regression model with house size (House) as the dependent 25)
variable and family size (Size) as the independent variable, he obtained an r2 value of 1.25%. What
additional percentage of the total variation in house size has been explained by including income in
the multiple regression?
A) 71.50% B) 73.62% C) 15.00% D) 70.64%
26) Which of the following values for the level of significance is the smallest for which at least one 26)
explanatory variable is significant individually?
A) 0.050 B) 0.010 C) 0.005 D) 0.025
27) Which of the following values for the level of significance is the smallest for which the regression 27)
model as a whole is significant?
A) 0.05 B) 0.01 C) 0.001 D) 0.0005
28) At the 0.01 level of significance, what conclusion should the builder draw regarding the inclusion 28)
of Size in the regression model?
A) Size is not significant in explaining house size and should not be included in the model
because its p-value is less than 0.01.
B) Size is significant in explaining house size and should be included in the model because its
p-value is less than 0.01.
C) Size is significant in explaining house size and should be included in the model because its
p-value is more than 0.01.
D) Size is not significant in explaining house size and should not be included in the model
because its p-value is more than 0.01.
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.
29) What is the predicted house size (in hundreds of square feet) for an individual earning an 29)
annual income of $40,000 and having a family size of 4?
30) One individual in the sample had an annual income of $100,000 and a family size of 10. 30)
This individual owned a home with an area of 7,000 square feet (House = 70.00). What is
the residual (in hundreds of square feet) for this data point?
31) What is the value of the calculated F test statistic that is missing from the output for testing 31)
whether the whole regression model is significant?
32) The observed value of the F-statistic is missing from the printout. What are the degrees of freedom 32)
for this F-statistic?
A) 49 for the numerator, 47 for the denominator
B) 2 for the numerator, 47 for the denominator
C) 2 for the numerator, 49 for the denominator
D) 47 for the numerator, 49 for the denominator
4
33) Allowing for a 1% probability of committing a type I error, what is the decision and conclusion for 33)
the test H0 : 1 = 2 = 0 vs. H1 : At least one j 0, j = 1, 2?
A) Do not reject H0 and conclude that the 2 independent variables taken as a group have
significant linear effects on house size.
B) Do not reject H0 and conclude that the 2 independent variables taken as a group do not have
C) Reject H0 and conclude that the 2 independent variables taken as a group do not have
D) Reject H0 and conclude that the 2 independent variables taken as a group have significant
linear effects on house size.
34) The value of the partial F test statistic is ________ for 34)
H0 : Variable X1 does not significantly improve the model after variable X2 has been
included
H1 : Variable X1 significantly improves the model after variable X2 has been included
35) The partial F test for 35)

included
has ________ and ________ degrees of freedom.
2
36) The coefficient of partial determination r Y1·2 is ________. 36)
37) ________% of the variation in the house size can be explained by the variation in the family 37)
income while holding the family size constant.
5
One of the most common questions of prospective house buyers pertains to the cost of heating in dollars (Y). To provide its
customers with information on that matter, a large real estate firm used the following 2 variables to predict heating costs: the
daily minimum outside temperature in degrees of Fahrenheit (X1 ) and the amount of insulation in inches (X2 ). Given below
is EXCEL output of the regression model.
Also SSR (X1 X2 ) = 8343.3572 and SSR (X2 X1 ) = 4199.2672
38) The estimated value of the regression parameter 1 means that 38)
A) holding the effect of the amount of insulation constant, a 1 degree increase in the daily
minimum outside temperature results in a decrease in heating costs by $2.76.
B) holding the effect of the amount of insulation constant, an estimated expected $1 increase in
heating costs is associated with a decrease in the daily minimum outside temperature by 2.76
degrees.
C) holding the effect of the amount of insulation constant, a 1 degree increase in the daily
minimum outside temperature results in an estimated decrease in mean heating costs by
$2.76.
D) holding the effect of the amount of insulation constant, a 1% increase in the daily minimum
outside temperature results in an estimated decrease in mean heating costs by 2.76%.
39) What can we say about the regression model? 39)

A) The model explains 19.28% of the variability of heating costs; after correcting for the degrees
of freedom, the model explains 27.78% of the sample variability of heating costs.
B) The model explains 19.28% of the variability of heating costs; after correcting for the degrees
C) The model explains 17.12% of the variability of heating costs; after correcting for the degrees
D) The model explains 27.78% of the variability of heating costs; after correcting for the degrees
6
40) What is your decision and conclusion for the test H0 : 2 = 0 vs. H1 : 2 0 at the = 0.01 level of 40)
significance?
A) Do not reject H0 and conclude that the amount of insulation does not have a linear effect on
heating costs.
B) Do not reject H0 and conclude that the amount of insulation has a linear effect on heating
costs.
C) Reject H0 and conclude that the amount of insulation has a linear effect on heating costs.
D) Reject H0 and conclude that the amount of insulation does not have a linear effect on heating
costs.
41) What is the 95% confidence interval for the expected change in heating costs as a result of a 1 41)
degree Fahrenheit change in the daily minimum outside temperature?
A) [-5.3721, -0.1520] B) [204.7854, 497.1733]
C) [-37.1736, 5.2919] D) [256.7522, 639.8328]
42) Allowing for a 1% probability of committing a type I error, what is the decision and conclusion for 42)
the test H0 : 1 = 2 = 0 vs. H1 : At least one j 0, j = 1, 2?
A) Do not reject H0 and conclude that the 2 independent variables taken as a group have
significant linear effects on heating costs.
B) Reject H0 and conclude that the 2 independent variables taken as a group do not have
C) Reject H0 and conclude that the 2 independent variables taken as a group have significant
linear effects on heating costs.
D) Do not reject H0 and conclude that the 2 independent variables taken as a group do not have
43) The value of the partial F test statistic is ________ for 43)
included
44) The partial F test for 44)

included
has ________ and ________ degrees of freedom.
2
2
47) ________% of the variation in heating cost can be explained by the variation in minimum 47)
outside temperature while holding the amount of insulation constant.
7
48) ________% of the variation in heating cost can be explained by the variation in the amount 48)
of insulation while holding the minimum outside temperature constant.
A financial analyst wanted to examine the relationship between salary (in $1,000) and 2 variables: age (X1 = Age) and
experience in the field (X2 = Exper). He took a sample of 20 employees and obtained the following Microsoft Excel output:
Also, the sum of squares due to the regression for the model that includes only Age is 5022.0654 while the sum of squares due
to the regression for the model that includes only Exper is 125.9848.
49) The estimate of the unit change in the mean of Y per unit change in X1 , taking into 49)
account the effects of the other variable, is ________.
50) The estimated change in the mean salary (in $1,000) when an employee is a year older 50)
holding experience constant is ________.
51) The estimated change in the mean salary (in $1,000) for an employee who has one 51)
additional year of experience holding age constant is ________.
52) The predicted salary (in $1,000) for a 35-year-old person with 10 years of experience is 52)
________.
53) The value of the coefficient of multiple determination is ________. 53)
54) The value of the adjusted coefficient of multiple determination is ________. 54)
55) The analyst wants to use an F test to test H0 : 1 = 2 = 0. The appropriate alternative 55)
hypothesis is ________.
8
56) The critical value of an F test on the entire regression for a level of significance of 0.01 is 56)
________.
57) The value of the F-statistic for testing the significance of the entire regression is ________. 57)
58) The p-value of the F test for the significance of the entire regression is ________. 58)
59) True or False: The F test for the significance of the entire regression performed at a level of 59)
significance of 0.01 leads to a rejection of the null hypothesis.
A weight-loss clinic wants to use regression analysis to build a model for weight loss of a client (measured in pounds). Two
variables thought to affect weight loss are client's length of time on the weight-loss program and time of session. These
variables are described below:
Y = Weight loss (in pounds)

X1 = Length of time in weight-loss program (in months)
X2 = 1 if morning session, 0 if not
Data for 25 clients on a weight-loss program at the clinic were collected and used to fit the interaction model:
Y = 0 + 1 X1 + 2 X2 + 3 X1 X2 +
Output from Microsoft Excel follows:
60) What is the experimental unit for this analysis? 60)

A) a month B) a morning, afternoon, or evening session
C) a clinic D) a client on a weight-loss program
9
61) What null hypothesis would you test to determine whether the slope of the linear relationship 61)
between weight loss (Y) and time on the program (X1 ) varies according to time of session?
A) H0 : 3 = 0 B) H0 : 2 = 0 C) H0 : 1 = 0 D) H0 : 1 = 2 = 0
62) In terms of the s in the model, give the mean change in weight loss (Y) for every 1 month increase 62)
in time on the program (X1 ) when not attending the morning session.
A) 2 + 3 B) 1 + 2 C) 1 + 3 D) 1
63) In terms of the s in the model, give the mean change in weight loss (Y) for every 1 month increase 63)
in time on the program (X1 ) when attending the morning session.
A) 2 + 3 B) 1 + 2 C) 1 D) 1 + 3
64) True or False: The overall model for predicting weight loss (Y) is statistically significant at the 0.05 64)
level.
65) Which of the following statements is supported by the analysis shown? 65)
A) There is insufficient evidence (at = 0.05) to indicate that the relationship between weight
loss (Y) and months on program (X1 ) varies with session time.
B) There is sufficient evidence (at = 0.05) of curvature in the relationship between weight loss
(Y) and months on program (X1 ).
C) There is sufficient evidence (at = 0.05) to indicate that the relationship between weight loss
(Y) and months on program (X1 ) varies with session time.
D) There is insufficient evidence (at = 0.05) of curvature in the relationship between weight
loss (Y) and months on program (X1 ).
An automotive engineer would like to be able to predict automobile mileages. She believes that the two most important
characteristics that affect mileage are horsepower and the number of cylinders (4 or 6) of a car. She believes that the
appropriate model is
Y = 40 - 0.05X1 + 20X2 - 0.1X1 X2
where X1 = horsepower
X2 = 1 if 4 cylinders, 0 if 6 cylinders
Y = mileage
66) The predicted mileage for a 300 horsepower, 6-cylinder car is ________. 66)
67) The predicted mileage for a 200 horsepower, 4-cylinder car is ________. 67)
68) The fitted model for predicting mileages for 6-cylinder cars is ________. 68)
A) 40 - 0.10X1 B) 60 - 0.10X1 C) 60 - 0.15X1 D) 40 - 0.05X1
10
69) The fitted model for predicting mileages for 4-cylinder cars is ________. 69)
A) 60 - 0.10X1 B) 40 - 0.05X1 C) 40 - 0.10X1 D) 60 - 0.15X1
What are the factors that determine the acceleration time (in sec.) from 0 to 60 miles per hour of a car? Data on the following
variables for 30 different vehicle models were collected:
Y (Accel Time): Acceleration time in sec.

X1 (Engine Size): c.c.
X2 (Sedan): 1 if the vehicle model is a sedan and 0 otherwise
The regression results using acceleration time as the dependent variable and the remaining variables as the independent
variables are presented below.
The various residual plots are as shown below.
11
12
2 2
The coefficient of partial determinations r Y1·2 and r Y2·1 are 0.3301, and 0.0594, respectively.
The coefficient of determination for the regression model using each of the 2 independent variables as the dependent variable
2
and the other independent variable as independent variables ( R j ) are, respectively 0.0077, and 0.0077.
70) Which of the following assumptions is most likely violated based on the residual plot of the 70)
residuals versus predicted Y?
A) Normality of errors B) None of the above
C) Independence of errors D) Equal variance
71) Which of the following assumptions is most likely violated based on the residual plot for Engine 71)
Size?
A) None of the above B) Independence of errors
C) Normality of errors D) Linearity
72) Which of the following assumptions is most likely violated based on the normal probability plot? 72)
A) Equal variance B) Independence C) Linearity D) Normality
73) True or False: The error appears to be left-skewed. 73)
A logistic regression model was estimated in order to predict the probability that a randomly chosen university or college
would be a private university using information on mean total Scholastic Aptitude Test score (SAT) at the university or
college and whether the TOEFL criterion is at least 90 (Toefl90 = 1 if yes, 0 otherwise). The dependent variable, Y, is school
type (Type = 1 if private and 0 otherwise).
The PHStat output is given below:
74) Which of the following is the correct expression for the estimated model? 74)
^
A) Y = -3.9594 + 0.0028 SAT + 0.1928 Toefl90
B) ln (odds ratio) = -3.9594 + 0.0028 SAT + 0.1928 Toefl90
C) ln (estimated odds ratio) = -3.9594 + 0.0028 SAT + 0.1928 Toefl90
D) Y = -3.9594 + 0.0028 SAT + 0.1928 Toefl90
13
75) What is the estimated odds ratio for a school with a mean SAT score of 1250 and a TOEFL 75)
criterion that is at least 90?
76) What is the estimated probability that a school with a mean SAT score of 1250 and a 76)
TOEFL criterion that is at least 90?
77) Which of the following is the correct interpretation for the SAT slope coefficient? 77)
A) Holding constant the effect of Toefl90, the estimated natural logarithm of the odds ratio of the
school being a private school increases by 0.0028 for each increase of one point in mean SAT
score.
B) Holding constant the effect of Toefl90, the estimated school type increases by 0.0028 for each
increase of one point in average SAT score.
C) Holding constant the effect of Toefl90, the estimated probability of the school being a private
school increases by 0.0028 for each increase of one point in mean SAT score.
D) Holding constant the effect of Toefl90, the estimated mean value of school type increases by
0.0028 for each increase of one point in average SAT score.
78) What is the p-value of the test statistic when testing whether SAT makes a significant 78)
contribution to the model in the presence of Toefl90?
79) What should be the decision ('reject' or 'do not reject') on the null hypothesis when testing 79)
whether SAT makes a significant contribution to the model in the presence of Toefl90 at a
0.05 level of significance?
80) True or False: There is not enough evidence to conclude that SAT score makes a significant 80)
contribution to the model in the presence of Toefl90 at a 0.05 level of significance.
14
Answer Key
Testname: CH14
1) B
2) D
3) D
4) TRUE
5) TRUE
6) TRUE
7) TRUE
8) TRUE
9) TRUE
10) TRUE
11) FALSE
12) TRUE
13) TRUE
14) TRUE
15) B
16) B
17) B
18) B
19) D
20) A
21) A
22) B
23) B
24) A
25) D
26) C
27) D
28) B
29) 33.71
30) -22.55
31) 60.09
32) B
33) D
34) 118.0879
35) 1; 47
36) 0.7153
37) 71.53
38) C
39) D
40) A
41) A
42) D
43) 4.99
44) 1; 17
45) 0.2267
46) 0.1286
47) 22.67
48) 12.86
49) 1.3045
50) 1.3045
15
Answer Key
Testname: CH14
51) -0.1478
52) 45.7536
53) 0.7284
54) 0.6964
55) at least one j 0 for j = 1, 2
56) 6.1121
57) 22.7941
58) 0.0000
59) TRUE
60) D
61) A
62) D
63) D
64) TRUE
65) A
66) 25
67) 30
68) D
69) D
70) D
71) D
72) D
73) TRUE
74) C
75) 0.7660
76) 0.4337
77) A
78) 0.0109
79) Reject
80) FALSE
16

Multiple Regression Exam

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Exam

1) In a multiple regression problem involving two independent variables, if b1 is computed to be +2.0, 1)

2) In a multiple regression model, the value of the coefficient of multiple determination 2)

Also SSR (X1 X2 ) = 36400.6326 and SSR (X2 X1 ) = 3297.7917

35) The partial F test for 35)

Also SSR (X1 X2 ) = 8343.3572 and SSR (X2 X1 ) = 4199.2672

39) What can we say about the regression model? 39)

44) The partial F test for 44)

53) The value of the coefficient of multiple determination is ________. 53)

Y = Weight loss (in pounds)

Output from Microsoft Excel follows:

60) What is the experimental unit for this analysis? 60)

Y = 40 - 0.05X1 + 20X2 - 0.1X1 X2

Y (Accel Time): Acceleration time in sec.

The various residual plots are as shown below.

73) True or False: The error appears to be left-skewed. 73)

The PHStat output is given below:

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