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- Date Submitted: 12/08/2014 10:09 PM
- Category: Business
- Words: 8009
- Page: 33

CHAPTER FOURTEEN

SIMPLE LINEAR REGRESSION

MULTIPLE CHOICE QUESTIONS

In the following multiple choice questions, circle the correct answer.

1. The standard error is the

a. t-statistic squared

b. square root of SSE

c. square root of SST

d. square root of MSE

Answer: d

2. If MSE is known, you can compute the

a. r square

b. coefficient of determination

c. standard error

d. all of these alternatives are correct

Answer: c

3. In regression analysis, which of the following is not a required assumption about the error term ?

a. The expected value of the error term is one.

b. The variance of the error term is the same for all values of X.

c. The values of the error term are independent.

d. The error term is normally distributed.

Answer: a

4. A regression analysis between sales (Y in $1000) and advertising (X in dollars) resulted in the following equation

= 30,000 + 4 X

The above equation implies that an

a. increase of $4 in advertising is associated with an increase of $4,000 in sales

b. increase of $1 in advertising is associated with an increase of $4 in sales

c. increase of $1 in advertising is associated with an increase of $34,000 in sales

d. increase of $1 in advertising is associated with an increase of $4,000 in sales

Answer: d

5. Regression analysis is a statistical procedure for developing a mathematical equation that describes how

a. one independent and one or more dependent variables are related

b. several independent and several dependent variables are related

c. one dependent and one or more independent variables are related

d. None of these alternatives is correct.

Answer: c

6. In a simple regression analysis (where Y is a dependent and X an independent variable), if the Y intercept is positive, then

a. there is a positive correlation between X and Y

b. if X is increased, Y must also increase

c. if Y is increased, X must also increase

d. None of these...

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