chap13-TIF-SMUME5e

# chap13-TIF-SMUME5e - 174 Simple Linear Regression CHAPTER...

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Unformatted text preview: 174 Simple Linear Regression CHAPTER 13: SIMPLE LINEAR REGRESSION 1. The Y-intercept ( 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 Y-intercept ( 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 13-1 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 bank’s 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 company’s sales revenue ( X ) -- measured in millions of dollars. Data for 21 companies who use the bank’s services were used to fit the model: E ( Y ) = β + β 1 X The results of the simple linear regression are provided below. µ 2,700 20 , 65, two-tailed value 0.034 (for testing ) YX Y X S p β 1 = - + = = 5. Referring to Table 13-1, interpret the estimate of β , the Y-intercept 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 13-1, interpret the estimate of σ , 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....
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chap13-TIF-SMUME5e - 174 Simple Linear Regression CHAPTER...

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