# HWChapter12 - diagram and to compute the least squares...

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1. Given below are seven observations collected in a regression study on two variables, x (independent variable) and y (dependent variable). x y 2 12 3 9 6 8 7 7 8 6 7 5 9 2 a. Develop the least squares estimated regression equation. b. At 95% confidence, perform a t test and determine whether or not the slope is significantly different from zero. c. Perform an F test to determine whether or not the model is significant. Let α = 0.05. d. Compute the coefficient of determination. ANS: a. = 13.75 - 1.125 x b. t = -5.196 < -2.571; reject H o c. F = 27 > 6.61; reject H o d. 0.844

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2. A company has recorded data on the weekly sales for its product ( y ) and the unit price of the competitor's product ( x ). The data resulting from a random sample of 7 weeks follows. Use Excel to develop a scatter
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Unformatted text preview: diagram and to compute the least squares estimated regression equation and the coefficient of determination. Week Price Sales 1 .33 20 2 .25 14 3 .44 22 4 .40 21 5 .35 16 6 .39 19 7 .29 15 a) Using the above information, develop the least-squares estimated regression line. b) Compute the coefficient of determination. c) Perform an F test and determine whether or not there is a significant relationship between demand and unit price. Let = 0.05. d) Perform a t test to determine whether the slope is significantly different from zero. Let = 0.05. e) Would the demand ever reach zero? If yes, at what price would the demand be zero? Show your complete work....
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## This note was uploaded on 03/27/2010 for the course FINANCE Ali taught by Professor Finance during the Spring '10 term at Abraham Baldwin Agricultural College.

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HWChapter12 - diagram and to compute the least squares...

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