IS Exam 3

Based on the residual plot below, you will conclude that there might be a violation of which of the following assumptions? A) independence of errors B) homoscedasticity C) linearity of the relationship D) normality of errors

29) B

50) A dummy variable is used as an independent variable in a regression model when A) the variable involved is categorical. B) a curvilinear relationship is suspected. C) the variable involved is numerical. D) when 2 independent variables interact.

50) A

1) When testing for independence in a contingency table with 3 rows and 4 columns, there are __________ degrees of freedom. A) 7 B) 12 C) 6 D) 5

1) C

19) The Y intercept (b0) represents the A) predicted value of Y when X = 0. B) variation around the sample regression line. C) predicted value of Y. D) change in estimated average Y per unit change in X.

19) A

20) The least squares method minimizes which of the following? A) SST B) SSR C) SSE D) all of the above

20) C

34) The coefficient of multiple determination r2Y.12 A) measures the proportion of variation in Y that is explained by X1 and X2. B) measures the proportion of variation in Y that is explained by X1 holding X2 constant. C) measures the variation around the predicted regression equation. D) will have the same sign as b1.

34) A

35) In a multiple regression model, which of the following is correct regarding the value of the adjusted r2? A) It has to be larger than the coefficient of multiple determination. B) It can be negative. C) It can be larger than 1. D) It has to be positive.

35) D

51) To explain personal consumption (CONS) measured in dollars, data is collected for INC: personal income in dollars CRDTLIM: $1 plus the credit limit in dollars available to the individual APR: average annualized percentage interest rate for borrowing for the individual ADVT: per person advertising expenditure in dollars by manufacturers in the city where the individual lives SEX: gender of the individual; 1 if female, 0 if male A regression analysis was performed with CONS as the dependent variable and ln(CRDTLIM), ln(APR), ln(ADVT), and SEX as the independent variables. The estimated model was = 2.28-029 ln(CRDTLIM) + 5.77 ln(APR) + 2.35 ln(ADVT) + 0.39 SEX What is the correct interpretation for the estimated coefficient for SEX? A) Holding everything else fixed, personal consumption for females is estimated to be $0.39 higher than males, on the average. B) Holding everything else fixed, personal consumption for males is estimated to be 0.39% higher than females, on the average. C) Holding everything else fixed, personal consumption for females is estimated to be 0.39% higher than males, on the average. D) Holding everything else fixed, personal consumption for males is estimated to be $0.39 higher than females, on the average.

51) A