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CHAPTER 4 BOOK QUESTIONS.docx

CHAPTER 4 BOOK QUESTIONS.docx - CHAPTER 4 BOOK QUESTIONS 1...

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CHAPTER 4 BOOK QUESTIONS 1. The director of marketing at Vanguard Corporation believes that sales of the company’s Bright Side laundry detergent (S) are related to Vanguard’s own advertising expenditure (A), as well as the combined advertising expenditures of its three biggest rival detergents (R). The marketing director collects 36 weekly observations on S, A, and R to estimate the following multiple regression equation: S = a + bA + cR where S, A, and R are measured in dollars per week. Vanguard’s marketing director is comfortable using parameter estimates that are statistically significant at the 10 percent level or better. a. What sign does the marketing director expect a, b , and c to have? b. Interpret the coefficients a, b, and c . The regression output from the computer is as follows: c. Does Vanguard’s advertising expenditure have a statistically significant effect on the sales of Bright Side detergent? Explain, using the appropriate p -value.
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