58 HI6007 Statistics for B. Total Company Profitability D/E Sales ROE M/B Asset Atlanta 60.60 45.40 37.00 74.90 31.30 Boston 59.10 46.00 36.70 77.70...
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Profitability 1.00

Total Asset 0.73 1.00

D/E 0.57 0.46 1.00

Sales 0.00 0.11 -0.04 1.00

ROE 0.01 -0.29 -0.29 -0.24 1.00

M/B 0.67 0.55 0.29 0.08 -0.10 1.00

(a) Test the hypothesis that there is no significant relationship between the dependent 

and all independent variables. (5 marks)

(b) Write down the estimated regression equation. (2 marks)

(c) Interpret individual slope coefficients and at the .05 level of significance, test for a 

significant relationship. (6 marks)

(question continues on the next page)

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5:58
HI6007 Statistics for B...
Q
. . .
Total
Company
Profitability
D/E
Sales
ROE
M/B
Asset
Atlanta
60.60
45.40
37.00
74.00
9.90
31.30
Boston
59.10
46.00
36.70
77.80
7.70
31.10
Brooklyn
33.30
42.50
34.20
77.70
11.90
28.50
Charlotte
10.60
41.40
29.50
74.60
10.30
28.70
Chicago
75.80
45.20
37.50
72.20
13.90
32.80
Cleveland
31.80
42.20
34.60
71.60
12.70
29.50
Dallas
54.50
44.30
33.90
77.10
10.10
32.70
Denver
57.60
47.60
33.20
73.50
11.20
31.90
Detroit
37.90
43.80
34.60
75.20
11.70
28.50
Golden State
34.80
45.70
38.80
77.00
9.70
29.50
Houston
51.50
44.90
35.90
78.20
11.70
30.50
Indiana
63.60
43.80
36.80
78.20
12.50
31.40
LA Clippers
60.60
15.50
35.70
68.00
12.10
29.40
LA Lakers
62.10
45.70
32.60
75.60
12.10
34.10
Memphis
62.10
14.70
32.60
75.90
12.60
29.50
Miami
69.70
46.90
35.90
77.50
10.40
31.20
Milwaukee
47.00
44.30
34.50
77.40
12.40
30.00
Minnesota
39.40
43.30
33.20
77.10
12.10
31.70
New Orleans
31.80
45.10
33.30
75.70
11.00
30.20
New York
54.50
44.30
33.60
74.10
11.30
30.50
Oklahoma
71.20
47.10
35.80
80.60
11.00
32.70
City
Orlando
56.10
44.10
37.50
66.00
11.20
31.20
Philadelphia
53.00
14.80
36.20
74.20
10.70
32.50
Phoenix
50.00
45.80
34.30
75.70
10.90
30.80
Portland
42.40
44.30
34.60
79.60
11.10
29.50
Sacramento
33.30
43.60
31.60
73.60
13.40
29.50
San Antonio
75.80
47.80
39.30
74.80
10.30
32.60
Toronto
34.80
44.00
34.00
77.00
10.60
31.40
Utah
54.50
45.60
32.30
75.40
13.00
31.10
Washington
30.30
44.10
32.00
72.70
11.70
29.90
HI6007 Final Exam T1 2017
Regression Statistics
Multiple R
0.8764
R Square
0.7680
Adjusted R
Square
0.7197
Standard
Error
8.2663
Observations
30
ANOVA
Significance
df
SS
MS
F
Regression
5
5429.4550 1085.8910
15.8916
6.1314E-07
Residual
24
1639.9520
68.3313
Total
29
7069.407
Standard
Coefficients
Error
t Stat
P-value
Intercept
407.9703
68.9533
5.9166
00041
TA
4 9617
1 3676
3 6276
0.0013
O
O

Screenshot_20191001-175901.jpg

Regression Statistics
Multiple R
0.8764
R Square
0.7680
Adjusted R
Square
0.7197
Standard
Error
8.2663
Observations
30
ANOVA
Significance
df
SS
MS
F
F
Regression
5429.4550 1085.8910
15.8916 6.1314E-07
Residual
24
1639.9520
68.3313
Total
29
7069.407
Standard
Coefficients
Error
t Stat
P-value
Intercept
-407.9703
68.9533
-5.9166
00041
TA
4.9612
1.3676
3.6276
0.0013
D/E
2.3749
0.8074
2.9413
0.0071
Sales
0.0049
0.5182
0.0095
0.9925
ROE
3.4612
1.3462
2.5711
0.0168
M/B
3.6853
1.2965
2.8425
0.0090
Profitability
Total
Asset
D/E Sales
ROE
M/B
Profitability
1.00
Total Asset
0.73
1.00
D/E
0.57
0.46
1.00
Sales
0.00
0.11
-0.04
1.00
ROE
0.01
0.29
.0.29
0.24
1.00
M/B
0.67
0.55
0.29
0.08
-0.10
1.00
(a) Test the hypothesis that there is no significant relationship between the dependent
and all independent variables. (5 marks)
(b) Write down the estimated regression equation. (2 marks)
(c) Interpret individual slope coefficients and at the .05 level of significance, test for a
significant relationship. (6 marks)
(question continues on the next page)
HI6007 Final Exam T1 2017
5 / 8
6
(d) For the estimated regression equation developed in part (c), remove any
independent variables that are not significant at the .05 level of significance and
develop a new estimated regression equation using the remaining independent
variables. (3 marks)
(e) Interpret the correlation coefficient for each variables. Is there any multicollinearity
problem in the data? (4 marks)
(f) Interpret the coefficient of determination? How does this model fit? (2 marks)
(g) Assuming the estimated regression equation developed in part (d) can be used,
predict the profitability for a firm with the following values for the four independent
variables: TA 45, D/E 35, ROE 12, and M/B 30 (3 marks)

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