Business Analytics - Chapter 7: Midterm Review

The procedure of using sample data to find the estimated regression equation is better known as _____. a. point estimation b. interval estimation c. the least squares method d. extrapolation

c. the least squares method

The purpose of regression analysis is to a. verify a statistical hypothesis concerning the unknown population parameter b. check the correlation between the mean and the variance c. prove that the mean depends on the standard deviation d. identify the relationship between a dependent variable and one or more independent variables

d. identify the relationship between a dependent variable and one or more independent variables

A regression analysis between sales (y in $1000) and advertising (x in $100) resulted in the following equation . The above equation implies that an a. increase of $4 in advertising leads to an increase of $4,000 in predicted sales b. increase of $1 in advertising leads to an increase of $4 in predicted sales c. increase of $100 in advertising leads to an increase of $34,000 in predicted sales d. increase of $100 in advertising leads to an increase of $4,000 in predicted sales

d. increase of $100 in advertising leads to an increase of $4,000 in predicted sales

In regression analysis, y=B0+B1x1 +B2x2+.........+e is called a. covariance equation b. correlation equation c. estimated regression equation d. linear regression model

d. linear regression model

The standard error of the estimate s is the a. square root of the sum of squares due to regression (SSR) b. square root of sum of squares due to errors (SSE) c. square root of total sum of squares (SST) d. square root of mean square error (MSE)

d. square root of mean square error (MSE)

In the regression model , the standard deviation of the error term is estimated by a. the mean square error (MSE) b. the adjusted R2 c. the coefficient of determination R2 d. the standard error of the estimate s

d. the standard error of the estimate s

In multiple regression analysis, a. there can be any number of dependent variables but only one independent variable b. there must be only one independent variable c. the coefficient of determination must be larger than 1 d. there can be several independent variables, but only one dependent variable

d. there can be several independent variables, but only one dependent variable

In a regression model, which of the following tests is used in order to determine whether an individual independent variable is significant? a. t test b. z test c. Either z test or F test can be used d. chi-square test

a. t test

In regression analysis, the variable that is being predicted is the a. dependent variable b. independent variable c. intervening variable d. is usually x

a. dependent variable

If the coefficient of determination R2 is 0.95, then a. 95% of correlation between independent variables is explained b. 95% of observed variations in y is explained by the estimated regression equation c. one can be 95% confident that the predicted y is within 2s of the regression mean d. z = 1.96 is used to find the 95% confidence interval for a population mean

b. 95% of observed variations in y is explained by the estimated regression equation

In a regression model involving more than one independent variable, which of the following tests is used to examine the overall significance of the model? a. t test b. F test c. Either a t test or a chi-square test can be used d. z test

b. F test

In regression analysis, if the coefficient of determination R2 = 1, then a. SSE must also be equal to one b. SSE must be equal to zero c. SSE can be any positive value d. SSE must be negative

b. SSE must be equal to zero

One of the measures of the accuracy (goodness of fit) of the regression model is called the coefficient of a. regression b. determination c. statistical variability d. statistical importance

b. determination

In regression analysis, independent variables are a. used to predict other independent variables b. used to predict the dependent variable c. called the intervening variables d. the variable that is being predicted

b. used to predict the dependent variable

What would be the coefficient of determination R2 if the total sum of squares (SST) is 23.29 and the sum of squares due to error (SSE) is 13.26? a. 2.32 b. 0.43 c. 13.26 d. 0.89

b. 0.43

A variable that takes on the values of 0 or 1 and is used to incorporate the effect of categorical variables in a regression model is called a. an interaction b. a constant variable c. a dummy variable d. None of these alternatives is correct.

c. a dummy variable

In regression analysis, y= b0 +b1x1 + b2x2 + ...... + e developed from sample data is known as a. covariance equation b. correlation equation c. estimated regression equation d. sample equation

c. estimated regression equation

An estimated regression equation has the form: . As x1 increases by 1 unit (holding x2 constant), then y is expected to a. increase by 9 units b. decrease by 9 units c. increase by 2 units d. decrease by 2 units

c. increase by 2 units

In multiple regression analysis, the correlation among the independent variables is termed a. homoscedasticity b. linearity c. multicollinearity d. adjusted coefficient of determination

c. multicollinearity