Graded Homework 17
You have submitted this Homework 3 times (including this time).
You may submit this Homework a total of 40 times and receive full credit.
This homework covers serious multicollinearity of the independent variables,
material that can be found on pages 9698 in your course packet. The first three
questions are about assumptions that should have been on the last quiz  sorry about
the disorganization.
Question #1
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 mean of the residuals is zero.
•
The residuals are not correlated.
•
The error term has a normal distribution.
•
The mean of the error term is the same constant.
•
The errors are independent.
•
The residuals are independent.
•
The mean of the residuals is not correlated with the variance of the
residuals.
•
The variance of the residuals is the same constant.
•
The variance of the error term is the same constant.
•
The mean of the error term is zero.
•
The variance of the error term has a normal distribution.
•
The mean of the error term is not correlated with the variance of the error
term.
•
The errors are not correlated.
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: nk1, 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:
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51
•
50
•
57
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49
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6
.
You received a raw score of 100% on this question.
Question #3
All Canadians have governmentfunded 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 flatrate weekly rates,
regardless of age. 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
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 Spring '08
 Petry
 Regression Analysis, multicollinearity, independent variables, error term, raw score

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