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Unformatted text preview: 1 CHAPTER 18 SECTION 4-6: MODEL BUILDING MULTIPLE CHOICE 123. Stepwise regression is an iterative procedure that: a. adds one independent variable at a time. b. deletes one independent variable at a time. c. Either a or b. d. Both a and b. ANS: D PTS: 1 REF: SECTION 18.4-18.6 124. In a stepwise regression procedure, if two independent variables are highly correlated, then: a. both variables will enter the equation. b. only one variable will enter the equation. c. neither variable will enter the equation. d. not enough information is given to answer this question. ANS: B PTS: 1 REF: SECTION 18.4-18.6 125. In stepwise regression procedure, the independent variable with the largest F- statistic, or equally with the smallest p-value, is chosen as the first entering variable. The standard, also called the F-to-enter, is usually set at F equals: a. 4. b. 2. c. 1. d. 0. ANS: A PTS: 1 REF: SECTION 18.4-18.6 126. In a multiple regression analysis, which procedure permits variables to enter and leave the model at different stages of its development? a. Forward selection b. Residual analysis c. Backward elimination d. Stepwise regression ANS: D PTS: 1 REF: SECTION 18.4-18.6 127. One of the requirements of regression analysis is that the dependent variable must be: a. discrete. b. continuous. c. interval. d. nominal. ANS: C PTS: 1 REF: SECTION 18.4-18.6 2 128. If the probability of an event is .20, then the odds ratio in favor of the event occurring is expressed as a. 1 to 1 b. 1 to 2 c. 1 to 3 d. 1 to 4 ANS: D PTS: 1 REF: SECTION 18.4-18.6 129. Financial analysts would like to predict whether a company will become bankrupt in the next year, using independent variables such as company sales, product costs, market share, and profits. In this situation, which of the following methods is appropriate? a. The least squares technique b. Logistic regression c. Stepwise regression d. All of these choices are true ANS: B PTS: 1 REF: SECTION 18.4-18.6 130. If the odds ratio that Jessica achieving 25 or higher in the Admission College Test (ACT) is 4 (also expressed as 4 to 1), then the probability that Jessica will achieve her goal is a. 0.80 b. 0.85 c. 0.90 d. 0.95 ANS: A PTS: 1 REF: SECTION 18.4-18.6 131. The coefficients of the logistic regression model ln(...
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This note was uploaded on 09/28/2010 for the course FINOPMGT 250 taught by Professor Kumar during the Spring '10 term at University of Massachusetts Boston.
- Spring '10