chpt 7 faq

chpt 7 faq - FAQs Chapter 7 1. Why are both single and...

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FAQs – Chapter 7 1. Why are both single and multiple regressions run for the same problem? Why not simply run one multiple regression with all relevant variables? Run an individual regression analysis for EACH independent variable. Examine these outputs, and determine which independent variables are valid predictors of the dependent variable. Then, run multiple regressions with combinations of these valid independent variables. Alternatively, one could simply throw all the independent variables into a multiple regression, in which case it is likely that some or many of them would not belong, consequently causing the regression to poorly predict the dependent variable. The variables that do not belong could be identified by their low t-values. The t-value measures the degree of relationship between each independent variable and the dependent variable, so that variables with low t-values should be removed from the regression analysis. Then, another regression should be run that deletes those variables with the low
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This note was uploaded on 10/26/2010 for the course MBA FIN301 taught by Professor Park during the Spring '10 term at Liberty.

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chpt 7 faq - FAQs Chapter 7 1. Why are both single and...

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