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Statistics and Probability

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(e) In order to perform a hypothesis test for a linear relationship between the startup cost and
annual franchise fee cost, we need four assumptions. They are independence of all pairs of observations (3:1,y1), (332,312), . . .
linear relationship between a: and y constant variance of the residuals for all values of a: normal distribution of the residuals for all values of 3: Identify which plot(s) (A-C) on page 5 are used to verify these assumptions. Note that
some plots can be used more than once. i. ii. iii. iv. [1pt] Linearity A. Choose the plot(s) from the list that can be used to check the linearity assumption.
B. Is this assumption met? YES NO NOT ENOUGH INFORMATION [1pt] Constant Variance A. Choose the plot(s) from the list that can be used to check the constant variance
assumption. B. Is this assumption met? YES NO NOT ENOUGH INFORMATION [1pt] Normality A. Choose the plot(s) from the list that can be used to check the normality assumption.
B. Is this assumption met? YES NO NOT ENOUGH INFORMATION [1pt] Independence A. Choose the plot(s) from the list that can be used to check the independence as-
sumption. B. Is this assumption met? YES NO NOT ENOUGH INFORMATION

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Plot (A)
Plot (C)
150
.
. F
.
100
start up cost Residual
50-
-50 -
1000
.... .
1100
1200
1300
1400
1500
-100-
.
0.02-
0.05-
0.6-
0.8-
0.95-
0.98
Plot (B)
Normal Quantile
start up cost Residual
150
100
50
o
50
.100
1000 1050 1100
1150
1200
1250
1350 1400
annual frachise fee
For the following questions, suppose the hypothesis test assumptions are met
(regardless of your previous answers).
(f) What is the 95% confidence interval for B1?
For (ii) and (iii) round your answer to four decimal places.
i. [0.5pts]Report the degrees of freedom associated with this confidence interval.
ii. [0.5pts]What is the correct critical value (from Table D)?
iii. [1pt]Report the lower and upper bounds of your confidence interval.

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Yes No Yes Not enough... View the full answer

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