hw17 - Question#1 Which of the following are required...

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Which of the following are required assumptions in a multiple linear regression model? There are 5 correct choices. The mean of the error term has a normal distribution. The error term has a normal distribution. The errors are not correlated. The mean of the residuals is zero. The variance of the residuals is the same constant. The mean of the error term is zero. The residuals are not correlated. The errors are independent. The variance of the error term has a normal distribution. The mean of the error term is the same constant. The mean of the residuals is not correlated with the variance of the residuals. The mean of the error term is not correlated with the variance of the error term. The residuals are independent. The variance of the error term is the same constant. You made all of the correct selections. You received a raw score of 100% on this question. Question #2 In multiple regression, the residual degrees of freedom is given by: n-k-1, where n is the total sample size and k is the number of independent variables. So, if a multiple regression model includes 6 independent variables, and 57 observations on the y variable, the residual df should be: 51 50 49 6 57 . You received a raw score of 100% on this question. Question #3 All Canadians have government-funded health insurance, which pays for any medial care they require. However, when travelling out of the country, Canadians usually require supplementary health insurance to cover the difference between the costs incurred for emergency treatment and what the government program pays. To cover for the difference, private insurance companies charge flat-rate weekly rates, regardless of age. Question #1

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However, they realized that older people frequently incur greater medial emergency expenses and decided to offer rates based on the age of the customer. To help determine the new rates, one insurance company gathered data covering the age and mean daily medical expenses of a random sample of 1348 Canadians. Answer the following questions of this dataset. First run a regression where AGE is the independent variable and EXPENSE is the dependent variable. (Note:in the regression window, you should see Residuals and there should be four boxes. Make sure you check all four of them before you click ok. You should notice that you will be given addition output besides the usual regression output) . 1. Even before you analyze the residuals you know that this is cross sectional data and therefore, it cannot suffer from autocorrelation. To check whether the assumption of normality of the error term is satisfied, create a histogram of the standardized residuals. Go to Tools --> Data Analysis --> Histogram. Then select the Standardized Residuals you got in the regression output as the Input Range. Also, check the Chart Output option in the bottom of the dialog box. 2.
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hw17 - Question#1 Which of the following are required...

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