This preview shows pages 1–3. Sign up to view the full content.
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
Unformatted text preview: 174 Simple Linear Regression CHAPTER 13: SIMPLE LINEAR REGRESSION 1. The Yintercept ( b ) represents the a) predicted value of Y when X = 0. b) change in estimated average Y per unit change in X . c) predicted value of Y . d) variation around the sample regression line. ANSWER: a TYPE: MC DIFFICULTY: Easy KEYWORDS: intercept, interpretation 2. The Yintercept ( b ) represents the a) estimated average Y when X = 0. b) change in estimated average Y per unit change in X . c) predicted value of Y . d) variation around the sample regression line. ANSWER: a TYPE: MC DIFFICULTY: Easy KEYWORDS: intercept, interpretation 3. The slope ( b 1 ) represents a) predicted value of Y when X = 0. b) the estimated average change in Y per unit change in X . c) the predicted value of Y . d) variation around the line of regression. ANSWER: b TYPE: MC DIFFICULTY: Easy KEYWORDS: slope, interpretation 4. The least squares method minimizes which of the following? a) SSR b) SSE c) SST d) All of the above ANSWER: b TYPE: MC DIFFICULTY: Difficult KEYWORDS: least squares, properties TABLE 131 A large national bank charges local companies for using their services. A bank official reported the results of a regression analysis designed to predict the banks charges ( Y )  measured in dollars per 175 Simple Linear Regression month  for services rendered to local companies. One independent variable used to predict service charge to a company is the companys sales revenue ( X )  measured in millions of dollars. Data for 21 companies who use the banks services were used to fit the model: E ( Y ) = + 1 X The results of the simple linear regression are provided below. 2,700 20 , 65, twotailed value 0.034 (for testing ) YX Y X S p 1 =  + = = 5. Referring to Table 131, interpret the estimate of , the Yintercept of the line. a) All companies will be charged at least $2,700 by the bank. b) There is no practical interpretation since a sales revenue of $0 is a nonsensical value. c) About 95% of the observed service charges fall within $2,700 of the least squares line. d) For every $1 million increase in sales revenue, we expect a service charge to decrease $2,700. ANSWER: b TYPE: MC DIFFICULTY: Moderate KEYWORDS: intercept, interpretation 6. Referring to Table 131, interpret the estimate of , the standard deviation of the random error term (standard error of the estimate) in the model. a) About 95% of the observed service charges fall within $65 of the least squares line. b) About 95% of the observed service charges equal their corresponding predicted values. c) About 95% of the observed service charges fall within $130 of the least squares line. d) For every $1 million increase in sales revenue, we expect a service charge to increase $65....
View Full
Document
 Fall '07
 Reich

Click to edit the document details