### Expand the regression model

Assignment Help Basic Statistics
##### Reference no: EM13972148

Part -1:

DataPro is a small but rapidly growing firm that provides electronic data-processing services to commercial firms, hospitals and other organizations. For each of the past 12 months, DataPro has tracked the number of contracts sold, the average contract price, advertising expenditures, and personal selling expenditures.

1. Find the correlation between number of contracts sold and average contract price. What does this correlation mean?

2. Estimate a regression model with number of contracts sold as the dependent variable and the average contract price as the only independent variable. Test for the significance of contract prices (note: use one tail test and significance level .05). Interpret the contract price coefficient. Interpret the R2 for the model.

3. Expand the regression model from (2) and add the advertising variable. Test for the significance of both contract price and advertising variables (note: use a one tail test for each and significance level .05). Interpret the coefficient of the advertising variable.

4. Expand the regression model from (3) to include personal selling expenditures. After testing for significance of personal selling, interpret the coefficient.

5. What happened to the R2 as you added independent variables to the model? Will this always happen? Explain.

6. What happened to the adjusted R2 as you added independent variables to the model? Will this always happen? Explain.

Part -2:

1. The correlation coefficient between number of contracts sold and average contract price is
A) -1.000
B) 0.000
C) -0.016
D) none of the above

2. In general, a negative correlation coefficient of -.005 would suggest there is a strong negative relationship between two variables.
A) True
B) False

Answer questions 3-5 after estimating a regression model with number of contracts sold as the dependent variable and the average contract price as the only independent variable.

3. The estimated coefficient for contract price is found to be
A) -0.0237
B) 0.4690
C) -0.0506
D) none of the above

4. Using a one-tailed test, contract prices are found to be statistically significant at the 0.05 level.
A) True
B) False

5. The R Square value of 0.000256 found in this scenario means that only 0.0256% of the variation in the dependent variable (number of contracts sold) is explained by the variation in the independent variable (average contract price).
A) True
B) False

For questions 6-8, expand the regression model and add the advertising variable. Test for the significance of both contract price and advertising variables.

6. Which of the following statements best reflects the interpretation of the advertising variable?
A) On average, when the advertising expense increases by .0937300, contracts sold increases by one, holding constant all other variables.
B) On average, for every one unit (\$1) increase in advertising expense, contracts sold will increase by 0.09373 units (number of contracts sold), holding constant all other variables.
C) The advertising coefficient of 0.0937 indicates the increase in advertising expenditures as it relates to contract price for each movement in total contracts sold, holding constant all other variables.
D) none of the above

7. Which of the following represents the null hypothesis for the coefficient on contract price?
A) H0: contract price coefficient > 0
B) H0: contract price coefficient < 0
C) H0: contract price coefficient = 0
D) none of the above

8. According to the t-statistic and t-critical value, contract price is statistically insignificant.
A) True
B) False

Answer questions 9 and 10 after expanding the model to include personal selling expenditures.

9. The estimated coefficient for personal selling expenditures is found to be
A) 4.607 which implies that this variable is statistically insignificant.
B) 1.860 which implies that this variable is statistically insignificant.
C) 0.066 which implies that this variable is statistically insignificant.
D) none of the above

10. On average, for every one unit (\$1) increase in personal selling expenditure, contracts sold will increase by 0.066 units (number of contracts sold), holding constant all other variable.
A) True
B) False

11. The R-square will sometimes increase as variables are added, but not always.
A) True
B) False

12. The adjusted R-Square only increases if the added variable(s) add significant explanatory power to your regression.
A) True
B) False

Attachment:- Data.xls

Verified Expert

Provides a detailed description of correlation and regression analysis. in addition, describes the relationship between two variables and its strength and direction. In regression analysis, it also explains about the use of R square and adjusted R square values. when the r square will increase and when adjusted r square will increase are clearly mentioned.

#### Find the probability that among the ten patients

A doctor knows from experience that 20% of the patients to whom he gives a high blood pressure drug will have undesirable side effects. Assume the doctor gives that drug to te

#### Confidence interval for population mean-degree of confidence

The population standard deviation was 1.7 years. Using the 0.95 degree of confidence, what is the confidence interval for the population mean?

#### Problem regarding the source of the data

We found several sources of data by doing a Google search on "faculty head count by rank and gender." In addition to discussing the pattern you find, provide the data, the n

#### Construct a risk adjusted cumulative sum chart

Construct a risk-adjusted cumulative sum chart for patient mortality to determine if there has been an improvement. (Use the odds ratio under the alternative hypothesis to b

#### Test of goodness of fit to check coats follow probabilities

In this problem we want to run a test of goodness of fit to check whether the coats in the consignment follow the indicated probabilities.

#### Problems are not to be resolved with statistic software.

There is enough evidence, at a significance level of 10%, to conclude that this brand of corn flakes average sodium content is 130 milligrams? Please provide the steps. Prob

#### Report on things happening outside the u.s.

For this assignment you will research and report on things happening outside the U.S. relative to many of the issues we have covered in this class. Compare and contrast U.S.

#### Obtain the residuals for covariance model

b. For each treatment, plot the residuals against the fitted values. Also prepare a normal probability plot of the residuals and calculate the coefficient of correlation be

### Write a Review

#### Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!