Chp4-lecture_notes_linear_regression

Chp4-lecture_notes_linear_regression - Interpretation of...

Info icon This preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Module 4 - Simple Linear Regression Numerical Summaries for Two Quantitative Variables Objectives: Consider two quantitative variables, you should be able to • determine if they are related • determine how they are related • develop predictive models “At the Mercy of the Manager” by Craig Israelson Financial Planning , 30(5), pp. 54 - 56 Tax Efficiency – measure of tax due to investment portfolios – ranges from 0 – 100 – higher efficiency = less tax Consider: Tax Efficiency vs Stock Portfolios
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
% OF ENERGY SECURITIES TAX EFFICIENCY 11 10 9 8 7 6 5 4 3 100 90 80 70 60 50 TAX EFFICIENCY vs % OF ENERGY SECURITIES
Image of page 2
% OF ENERGY SECURITIES TAX EFFICIENCY 11 10 9 8 7 6 5 4 3 100 90 80 70 60 50 TAX EFFICIENCY vs % OF ENERGY SECURITIES Slope Estimate: -5 Intercept: 112 Rise Run Y = - 5 X + 112 where Y = Tax Efficiency (Response, Dependent variable) and X = % of Investments in energy stocks (Explanatory, Independent variable) Regression Equation
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Y = - 5 X + 112 where Y = Tax Efficiency and X = % of Investments in energy stocks
Image of page 4
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 6
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Interpretation of Constants? Regression Equation Problems: • Our eye tends to minimize the wrong distance. • Our estimate should not depend on the person performing the analysis Beware of • Extrapolation • Outliers / Influential Points • Nonlinear Relationships • Assuming Cause and Effect Nonlinear Relationships . Cooking Time Taste Rating . . . . . . . . . . . . . . . . . . Cause and Effect . Number of Churches Alcohol consumption . . . . . . . . . Key Concepts • simple linear regression equation • interpretation of coefficients • parameter vs statistic • impact of outliers • relationship between graphs and numerical summaries Assignment • Read Chapter 14 sections 1 – 2 • Review the Minitab Tutorial in Regression • Reproduce the text example output using Minitab • Work problems listed in WebCT Assignment Folder The End...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern