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STATISTICS FOR BUSINESS

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1. i. Multiple regression is used when two or more independent variables are used to
predict a value of a single dependent variable.
ii. The values of b1, b2, and b3 in a multiple regression equation are called the net
regression coefficients. They indicate the change in the predicted value for a unit
change in one X when the other X variables are held constant.
iii. Multiple regression analysis examines the relationship of several dependent
variables on the independent variable.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.

2. A manager at a local bank analyzed the relationship between monthly salary and
three independent variables: length of service (measured in months), gender (0 =
female, 1 = male) and job type (0 = clerical, 1 = technical). The following ANOVA
summarizes the regression results:

In the regression model, which of the following are dummy variables?

A. Intercept
B. Service
C. Service and gender
D. Gender and job
E. Service, gender, and job
3. The information below is from the multiple regression analysis computer output
for 28 teams in Major League Baseball. The model is designed to predict wins using
attendance, payroll, batting average, home runs, stolen bases, errors, and team
ERA.

Predict the number of wins for a team with:

BATAVG = 0.260 HOMERUNS = 150 ERA = 3
STOLENBASE = 100 ERROR = 100
PAYROLL = 25(million)
ATTENDANCE = 3(million)
A. 77
B. 102
C. 187
D. 210
E. 186
4. Angela Chou has been asked to investigate the determinants of poverty in
Ontario communities. She collected data on 60 communities from Statistics Canada.
She selected the percentage of poor persons living under the poverty line [Poor
(%)], measured by Low Income Cut-Off, designed by Statistics Canada as a measure
of poverty for a community, as the dependent variable. The independent variables
selected are percent of single families in each community, the unemployment rate
in each community, percent of population in the community holding a bachelor's
degree as their highest level of education attained, and percent of population
holding a High School Diploma as their highest level of education attained.
Given the regression equation Poor (%) = -3.81 + 0.798 Single-Families (%) + 0.624
Unemployment Rate (%) - 0.170 Bachelor's Degree (%) - 0.003 High School (%).
How many dependent variables are there in this regression?
A. 1
B. 2
C. 3
D. 4
E. 5

5. Angela Chou has been asked to investigate the determinants of poverty in

Ontario communities. She collected data on 60 communities from Statistics Canada.
She selected the percentage of poor persons living under the poverty line [Poor
(%)], measured by Low Income Cut-Off, designed by Statistics Canada as a measure
of poverty for a community, as the dependent variable. The independent variables
selected are percent of single families in each community, the unemployment rate
in each community, percent of population in the community holding a bachelor's
degree as their highest level of education attained, and percent of population
holding a High School Diploma as their highest level of education attained.
Given the regression equation Poor (%) = -3.81 + 0.798 Single-Families (%) + 0.624
Unemployment Rate (%) - 0.170 Bachelor's Degree (%) - 0.003 High School (%)
Interpret the numbers 3.81 and 0.798.
A. As the % of Single Families in an Ontario community increases, the % of poor
families increase as well, with a maximum of 3.81% of the population being poor.
B. As the % of Single Families in an Ontario community increases, the % of poor
families decrease.
C. There are 3.81% poor families and 0.798 Single-Families in Ontario communities.
D. 3.81 is the y-intercept. When all of the dependent variables have a value of zero,
we can expect that 3.81% of the community to be poor. 0.789 indicates that for an
extra 0.789% of poor families in a community, we can expect that the % of single
families will increase by 1%.
E. When all of the independent variables have a value of zero, we can expect that
-3.81% of the community to be poor, i.e. 0%. The 0.798 indicates that for each extra
% of single families in a community, we can expect that the % poor will increase by
almost 0.8%.
6. Angela Chou has been asked to investigate the determinants of poverty in
Ontario communities. She collected data on 60 communities from Statistics Canada.
She selected the percentage of poor persons living under the poverty line [Poor
(%)], measured by Low Income Cut-Off, designed by Statistics Canada as a measure
of poverty for a community, as the dependent variable. The independent variables
selected are percent of single families in each community, the unemployment rate
in each community, percent of population in the community holding a bachelor's
degree as their highest level of education attained, and percent of population
holding a High School Diploma as their highest level of education attained.
Given the regression equation Poor (%) = -3.81 + 0.798 Single-Families (%) + 0.624
Unemployment Rate (%) - 0.170 Bachelor's Degree (%) - 0.003 High School (%).What is the estimated percentage of poor persons living below the poverty line in a
community with 5% of the community as single-families, a 5% unemployment rate,
only 5% holding a Bachelor's Degree and 25% having High School as their highest
attained educational level?
A. 2.375
B. -2.375
C. 11.845
D. -11.845
7. Angela Chou has been asked to investigate the determinants of poverty in
Ontario communities. She collected data on 60 communities from Statistics Canada.
She selected the percentage of poor persons living under the poverty line [Poor
(%)], measured by Low Income Cut-Off, designed by Statistics Canada as a measure

of poverty for a community, as the dependent variable. The independent variables

selected are percent of single families in each community, the unemployment rate
in each community, percent of population in the community holding a bachelor's
degree as their highest level of education attained, and percent of population
holding a High School Diploma as their highest level of education attained.
Given the regression equation Poor (%) = -3.81 + 0.798 Single-Families (%) + 0.624
Unemployment Rate (%) - 0.170 Bachelor's Degree (%) - 0.003 High School (%)
Which single event would have the strongest effect in reducing the % poor in
Ontario?
A. Decreasing the % of single families by 5%.
B. Decreasing the Unemployment rate by 5%.
C. Increasing the % of persons with a Bachelor's Degree by 10%.
D. Decreasing the % of persons with a High School Diploma by 40%.
E. Increasing the % of persons with a Bachelor's Degree by 15%.
8. The following correlations were computed as part of a multiple regression
analysis that used education, job, and age to predict income.

Which is the dependent variable?

A. Income
B. Age
C. Education
D. Job
9. i. The values of b1, b2 and b3 in a multiple regression equation are called the net
regression coefficients. They indicate the change in the predicted value for a unit
change in one X when the other X variables are held constant.
ii. Multiple regression analysis examines the relationship of several dependent
variables on the independent variable.
iii. A multiple regression equation defines the relationship between the dependent
variable and the independent variables in the form of an equation.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
10. i. Multiple regression analysis examines the relationship of several dependent
variables on the independent variable.
ii. A multiple regression equation defines the relationship between the dependent
variable and the independent variables in the form of an equation.
iii. Autocorrelation often happens when data has been collected over periods of
time.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.

11. i. A multiple regression equation defines the relationship between the

dependent variable and the independent variables in the form of an equation.
ii. Autocorrelation often happens when data has been collected over periods of time.
iii. Homoscedasticity occurs when the variance of the residuals (Y - Y') is different
for different values of Y'.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
12. i. Autocorrelation often happens when data has been collected over periods of
time.
ii. Homoscedasticity occurs when the variance of the residuals (Y - Y') is different for
different values of Y'.
iii. Violating the need for successive observations of the dependent variable to be
uncorrelated is called autocorrelation.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
13. i. Violating the need for successive observations of the dependent variable to be
uncorrelated is called autocorrelation.
ii. If an inverse relationship exists between the dependent variable and independent
variables, the regression coefficients for the independent variables are negative.
iii. Given a multiple linear equation Y' = 5.1 + 2.2X1 - 3.5X2, assuming other things
are held constant, an increase in one unit of the second independent variable will
cause a -3.5 unit change in Y.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
14. i. If an inverse relationship exists between the dependent variable and
independent variables, the regression coefficients for the independent variables are
positive.
ii. Given a multiple linear equation Y' = 5.1 + 2.2X1 - 3.5X2, assuming other things
are held constant, an increase of one unit in the second independent variable will
cause a -3.5 unit change in Y.
iii. When the variance of the differences between the actual and the predicted
values of the dependent variable are approximately the same, the variables are said
to exhibit homoscedasticity.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).

E. (i), (ii), and (iii) are all false statements.

15. i. Multiple regression is used when two or more independent variables are used
to predict a value of a single dependent variable.
ii. The values of b1, b2 and b3 in a multiple regression equation are called the net
regression coefficients. They indicate the change in the predicted value for a unit
change in one X when the other X variables are held constant.
iii. Autocorrelation often happens when data has been collected over periods of
time.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
16. i. The values of b1, b2 and b3 in a multiple regression equation are called the
net regression coefficients. They indicate the change in the predicted value for a
unit change in one X when the other X variables are held constant.
ii. A multiple regression equation defines the relationship between the dependent
variable and the independent variables in the form of an equation.
iii. If an inverse relationship exists between the dependent variable and
independent variables, the regression coefficients for the independent variables are
positive.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
17. Multiple regression analysis is applied when analyzing the relationship between
A. an independent variable and several dependent variables.
B. a dependent variable and several independent variables.
C. several dependent variables and several independent variables.
D. several regression equations and a single sample.
18. Angela Chou has been asked to investigate the determinants of poverty in
Ontario communities. She collected data on 60 communities from Statistics Canada.
She selected the percentage of poor persons living under the poverty line [Poor
(%)], measured by Low Income Cut-Off, designed by Statistics Canada as a measure
of poverty for a community, as the dependent variable. The independent variables
selected are percent of single families in each community, the unemployment rate
in each community, percent of population in the community holding a bachelor's
degree as their highest level of education attained, and percent of population
holding a High School Diploma as their highest level of education attained.

Determine the regression equation.

A. Poor (%) = -3.81 - 0.798 Single-Families (%) + 0.624 Unemployment Rate (%) 0.170 Bachelor's Degree (%) - 0.003 High School (%)

B. Poor (%) = -3.81 + 0.798 Single-Families (%) + 0.624 Unemployment Rate (%) +
0.170 Bachelor's Degree (%) + 0.003 High School (%)
C. Poor (%) = 3.81 + 0.798 Single-Families (%) + 0.624 Unemployment Rate (%) 0.170 Bachelor's Degree (%) - 0.003 High School (%)
D. Poor (%) = -3.81 + 0.798 Single-Families (%) + 0.624 Unemployment Rate (%) 0.170 Bachelor's Degree (%) - 0.003 High School (%)
E. Poor (%) = 3.81 + 0.798 Single-Families (%) - 0.624 Unemployment Rate (%) +
0.170 Bachelor's Degree (%) - 0.003 High School (%)
19. Angela Chou has been asked to investigate the determinants of poverty in
Ontario communities. She collected data on 60 communities from Statistics Canada.
She selected the percentage of poor persons living under the poverty line [Poor
(%)], measured by Low Income Cut-Off, designed by Statistics Canada as a measure
of poverty for a community, as the dependent variable. The independent variables
selected are percent of single families in each community, the unemployment rate
in each community, and percent of population in the community holding a
bachelor's degree as their highest level of education attained.

Determine the regression equation.

A. Poor (%) = -3.81 + 0.798 Single-Families (%) + 0.624 Unemployment Rate (%) 0.170 Bachelor's Degree (%)
B. Poor (%) = -3.88 + 0.798 Single-Families (%) + 0.625 Unemployment Rate (%) 0.170 Bachelor's Degree (%)
C. Poor (%) = 3.88 + 0.798 Single-Families (%) + 0.625 Unemployment Rate (%) 0.170 Bachelor's Degree (%)
D. Poor (%) = -3.88 - 0.798 Single-Families (%) - 0.625 Unemployment Rate (%) 0.170 Bachelor's Degree (%)
E. Poor (%) = 3.88 + 0.798 Single-Families (%) + 0.625 Unemployment Rate (%) +
0.170 Bachelor's Degree (%)
20. How is the Y intercept in the multiple regression equation represented?
A. b1
B. x1
C. b2
D. x2
E. a
21. If there are four independent variables in a multiple regression equation, there
are also four
A. Y-intercepts.
B. regression coefficients.
C. dependent variables.
D. constant terms.
22. For a unit change in the first independent variable with other things being held
constant, what change can be expected in the dependent variable in the multiple
regression equation Y' = 5.2 + 6.3X1 - 7.1X2?
A. -7.1

B. +6.3
C. +5.2
D. +4.4
23. If the correlation between two variables, X and Y, is +0.67, what is the
regression coefficient for these two variables?
A. +0.67
B. > 0
C. < 0
D. = 0
24. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.09X5 + 26.8X6.
Explain the meaning of b2.
A. For each additional $1,000 of annual income, their satisfaction index is expected
to increase by 0.28 points.
B. For each additional $1,000 of annual income, their satisfaction index is expected
to increase by 2.8 points.
C. For each additional $1,000 of annual income, their satisfaction index is expected
to increase by 28 points.
D. For each additional living child, their satisfaction index is expected to increase by
42 points.
E. For each additional living child, their satisfaction index is expected to increase by
4.2 points.
25. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.09X5 + 26.8X6.
Explain the meaning of b3.
A. For each additional living child, their satisfaction index is expected to increase by
4.2 points.
B. For each additional living child, their satisfaction index is expected to increase by
42 points.
C. For each additional living child, their satisfaction index is expected to increase by
0.42 points.
D. For each additional $1,000 of annual income, their satisfaction index is expected
to increase by 0.028 points.
E. For each additional $1,000 of annual income, their satisfaction index is expected
to increase by 2.8 points.

26. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.09X5 + 26.8X6.
Explain the meaning of b4.
A. For each additional living child, their satisfaction index is expected to increase by
42 points.
B. For each additional $1,000 of annual income, their satisfaction index is expected
to increase by 0.028 points.
C. For each additional $10,000 in assets, their satisfaction index is expected to
increase by 0.12 points.
D. For each additional $10,000 in assets, their satisfaction index is expected to
increase by 1.2 points.
E. For each additional $10,000 in assets, their satisfaction index is expected to
increase by 12 points.
27. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.09X5 + 26.8X6.
Explain the meaning of b5.
A. For each additional 10 points on the health status index, their satisfaction index is
expected to increase by 9 points.
B. For each additional 10 points on the health status index, their satisfaction index
is expected to increase by 0.09 points.
C. For each additional 10 points on the health status index, their satisfaction index
is expected to increase by 0.9 points.
D. For each additional 10 points on the health status index, their satisfaction index
is expected to drop by 0.09 points.
E. For each additional 10 points on the health status index, their satisfaction index is
expected to decrease by 9 points.
28. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.09X5 + 26.8X6.
Explain the meaning of b6.
A. For each additional social activity per week, their satisfaction index is expected to
increase by 26.8 points.
B. For each additional social activity per week, their satisfaction index is expected to
increase by 2.68 points.

C. For each additional 10 points on the health status index, their satisfaction index
is expected to increase by 0.9 points.
D. For each additional $10,000 in assets, their satisfaction index is expected to
increase by 12 points.
E. For each additional living child, their satisfaction index is expected to increase by
42 points.
29. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.19X5 + 26.8X6.
What is the estimated index of satisfaction for a person who first married at 25, has
an annual income of $26,500, has two children, has assets of $156,000, has in index
of health status of 141, and has 2.5 social activities per week?
A. 389.1
B. 421.6
C. 366.0
D. 601.6
E. 769.8
30. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.19X5 + 26.8X6
What is the estimated index of satisfaction for a person who first married at 25, has
an annual income of $46,000, has two children, has assets of $200,000, has in index
of health status of 141, and has 2.5 social activities per week?
A. 368.3
B. 447.3
C. 366.0
D. 601.6
E. 769.8
31. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.19X5 + 26.8X6.
What is the estimated index of satisfaction for a person who first married at 25, has
an annual income of $46,000, has two children, has assets of $350,000, has in index
of health status of 141, and has 2.5 social activities per week?
A. 368.3

B. 421.6
C. 366.0
D. 627.3
E. 769.8
32. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.19X5 + 26.8X6.
What is the estimated index of satisfaction for a person who first married at 25, has
an annual income of $60,000, has two children, has assets of $350,000, has in index
of health status of 141, and has 2 social activities per week?
A. 777.7
B. 796.6
C. 617.9
D. 601.6
E. 769.8
33. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.19X5 + 26.8X6.
What is the estimated index of satisfaction for a person who first married at 25, has
an annual income of $100,000, has two children, has assets of $500,000, has in
index of health status of 141, and has 2 social activities per week?
A. 777.7
B. 796.6
C. 588.6
D. 601.6
E. 809.1
34. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.19X5 + 26.8X6.
What is the estimated index of satisfaction for a person who first married at 25, has
an annual income of $100,000, has two children, has assets of $500,000, has in
index of health status of 141, and has 3 social activities per week?
A. 777.7
B. 835.9
C. 588.6

D. 601.6
E. 769.8
35. A sample of General Mills employees was studied to determine their degree of
satisfaction with their present life. A special index, called the index of satisfaction,
was used to measure satisfaction. Six factors were studied: age at the time of first
marriage (X1), annual income (X2), number of children living (X3), value of all
assets (X4), status of health in the form of an index (X5), and the average number
of social activities per week (X6). Suppose the multiple regression equation is:
Y' = 16.24 + 0.017X1 + 0.00028X2 + 42X3 + 0.0012X4 + 0.19X5 + 26.8X6.
What is the estimated index of satisfaction for a person who first married at 25, has
an annual income of $100,000, has two children, has assets of $500,000, has in
index of health status of 141, and has 3.5 social activities per week?
A. 777.7
B. 796.6
C. 849.3
D. 601.6
E. 769.8
36. The information below is from the multiple regression analysis computer output
for 28 teams in Major League Baseball. The model is designed to predict wins using
attendance, payroll, batting average, home runs, stolen bases, errors, and team
ERA.

The multiple correlation coefficient is:

A. 0.900
B. 0.930
C. 0.656
D. 0.867
E. 0.949
37. What are the degrees of freedom associated with the regression sum of
squares?
A. Number of independent variables
B. 1
C. F-ratio
D. (n - 2)
38. In a regression analysis, three independent variables are used in the equation
based on a sample of forty observations. What are the degrees of freedom
associated with the F-statistic?
A. 3 and 39
B. 4 and 40
C. 3 and 36
D. 2 and 39
39. In regression analysis, the dfreg = ________.
A. the sample size - 1

B. the sample size - k - 1

C. the number of dependent variables
D. the number of independent variables
E. the sample size - k
40. In regression analysis, the dferr = ________.
A. the sample size -1
B. the sample size - k -1
C. the number of dependent variables
D. the number of independent variables
E. the sample size - k
41. What does the multiple standard error of estimate measure?
A. Change in Y' for a change in X1.
B. Variation of the data points between Y and Y'.
C. Variation due to the relationship between the dependent and independent
variables.
D. Amount of explained variation.
42. If a multiple regression analysis is based on ten independent variables collected
from a sample of 125 observations, what will be the value of the denominator in the
calculation of the multiple standard error of estimate?
A. 125
B. 10
C. 114
D. 115
43. i. Multiple R2 measures the proportion of explained variation.
ii. 90% of total variation in the dependent variable is explained by the independent
variable for a multiple R2= 0.90.
iii. The multiple standard error of estimate measures the variation about the
regression plane when two independent variables are considered.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
44. i. 90% of total variation in the dependent variable is explained by the
independent variable for a multiple R2= 0.90.
ii. The multiple standard error of estimate measures the variation about the
regression plane when two independent variables are considered.
iii. The multiple coefficient of determination, R2, reports the proportion of the
variation in Y that is not explained by the variation in the set of independent
variables.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.

45. i. The multiple standard error of estimate measures the variation about the
regression plane when two independent variables are considered.
ii. The multiple coefficient of determination, R2, reports the proportion of the
variation in Y that is not explained by the variation in the set of independent
variables.
iii. The coefficient of multiple determination reports the strength of the association
between the dependent variable and the set of independent variables.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
46. i. The multiple coefficient of determination, R2, reports the proportion of the
variation in Y that is not explained by the variation in the set of independent
variables.
ii. The coefficient of multiple determination reports the strength of the association
between the dependent variable and the set of independent variables.
iii. The multiple standard error of estimate for two independent variables measures
the variation about a regression plane.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
47. i. The coefficient of multiple determination reports the strength of the
association between the dependent variable and the set of independent variables.
ii. The multiple standard error of estimate for two independent variables measures
the variation about a regression plane.
iii. A multiple coefficient of determination equalling -0.76 is definitely possible.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
48. i. The multiple standard error of estimate for two independent variables
measures the variation about a regression plane.
ii. A multiple coefficient of determination equalling -0.76 is definitely possible.
iii. Multiple R2 measures the proportion of explained variation relative to total
variation.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
49. i. A coefficient of multiple determination equalling -0.76 is definitely possible.

ii. Multiple R2 measures the proportion of explained variation relative to total

variation.
iii. The number of degrees of freedom associated with the regression sum of
squares in the regression equation model equals the number of independent
variables.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
50. i. The multiple standard error of estimate measures the variation about the
regression plane when two independent variables are considered.
ii. A coefficient of multiple determination equalling -0.76 is definitely possible.
iii. The number of degrees of freedom associated with the regression sum of
squares in the regression equation model equals the number of independent
variables.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
51. i. The multiple coefficient of determination, R2, reports the proportion of the
variation in Y that is explained by the variation in the set of independent variables.
ii. The coefficient of multiple determination reports the strength of the association
between the dependent variable and the set of independent variables.
iii. A coefficient of multiple determination equalling -0.76 is definitely possible.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
52. The information below is from the multiple regression analysis computer output
for 28 teams in Major League Baseball. The model is designed to predict wins using
attendance, payroll, batting average, home runs, stolen bases, errors, and team
ERA.

The standard error of estimate is:

A. 4.467
B. 5.698
C. 5.864
D. 19.977
E. 15.917
53. A manager at a local bank analyzed the relationship between monthly salary
and three independent variables: length of service (measured in months), gender (0

= female, 1 = male) and job type (0 = clerical, 1 = technical). The following ANOVA
summarizes the regression results:

Based on the ANOVA, the multiple coefficient of determination is

A. 5.957%.
B. 59.3%.
C. 40.7%.
D. cannot be computed.
54. How is the degree of association between the set of independent variables and
the dependent variable is measured?
A. Confidence intervals
B. Autocorrelation
C. Coefficient of multiple determination
D. Standard error of estimate
55. What is the measurement of explained variation?
A. Coefficient of multiple determination
B. Coefficient of multiple nondetermination
C. Regression coefficient
D. Correlation matrix
56. If the coefficient of multiple determination is 0.81, what percent of variation is
not explained?
A. 19%
B. 90%
C. 66%
D. 81%
57. What is the range of values for multiple R?
A. -100% to -100% inclusive
B. -100% to 0% inclusive
C. 0% to +100% inclusive
D. Unlimited range
58. The coefficient of determination measures the proportion of
A. explained variation relative to total variation.
B. variation due to the relationship among variables.
C. error variation relative to total variation.
D. variation due to regression.
59. What happens as the scatter of data values about the regression plane
increases?
A. Standard error of estimate increases.
B. R2 decreases.
C. (1 - R2) decreases.
D. Residual sum of squares decreases.

E. (1 - R2), residual sum of squares and standard error of estimate all increase, and
R2 decreases.
60. Which test statistic do we apply to test the null hypothesis that the multiple
regression coefficients are all zero?
A. z
B. t
C. F
D. SPSS-X
61. What test investigates whether all the independent variables have zero net
regression coefficients?
A. Multicollinearity
B. Autocorrelation
C. Global
D. Pearson
62. Which of the following is a characteristic of the F-distribution?
A. Normally distributed
B. Positively skewed
C. Negatively skewed
D. Equal to the t-distribution
63. The best example of a null hypothesis for a global test of a multiple regression
model is:
A. H0: 1 = 2 = 3 = 4.
B. H0: 1 = 2 = 3 = 4.
C. H0: 1 = 0.
D. if F is greater than 20.00 then reject.
64. The best example of an alternate hypothesis for a global test of a multiple
regression model is:
A. H1: 1 = 2 = 3 = 4.
B. H1: 1 2 3 4.
C. H1: Not all the 's are 0.
D. if F is less than 20.00 then fail to reject.
65. In multiple regression, a dummy variable can be included in a multiple
regression model as
A. an additional quantitative variable.
B. a nominal variable with three or more values.
C. a nominal variable with only two values.
D. a new regression coefficient.
66. The information below is from the multiple regression analysis computer output
for 28 teams in Major League Baseball. The model is designed to predict wins using
attendance, payroll, batting average, home runs, stolen bases, errors, and team
ERA.

The number of degrees of freedom to be used in determining the critical value of t

to be used in a hypothesis test of the regression coefficients is:
A. 27
B. 26
C. 22
D. 21
E. 20
67. The information below is from the multiple regression analysis computer output
for 28 teams in Major League Baseball. The model is designed to predict wins using
attendance, payroll, batting average, home runs, stolen bases, errors, and team
ERA.

The critical value of F to be used in the global test of the model is: (5% level of
significance)
A. 2.51
B. 2.58
C. 3.70
D. 5.57
E. 3.39
68. The information below is from the multiple regression analysis computer output
for 28 teams in Major League Baseball. The model is designed to predict wins using
attendance, payroll, batting average, home runs, stolen bases, errors, and team
ERA.

The computed F for the global test is:

A. 7.802
B. 25.695
C. 15.790
D. 26.981
E. 114.779
69. A manager at a local bank analyzed the relationship between monthly salary
and three independent variables: length of service (measured in months), gender (0
= female, 1 = male) and job type (0 = clerical, 1 = technical). The following ANOVA
summarizes the regression results:

Based on the ANOVA and a 0.05 significance level, the global null hypothesis test of
the multiple regression model.
A. will be rejected and conclude that monthly salary is related to all of the
independent variables.

B. will be rejected and conclude that monthly salary is related to at least one of the
independent variables.
C. will not be rejected.
D. will show a high multiple coefficient of determination.
70. i. If the null hypothesis 4 = 0 is not rejected, then the independent variable X4
has a strong effect in predicting the dependent variable.
ii. A dummy variable is added to the regression equation to control for error.
iii. A variable whose possible outcomes are coded as a "1" or a "0" is called a strong
independent variable.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
71. i. A variable whose possible outcomes are coded as a "1" or a "0" is called a
dummy variable.
ii. A dummy variable is added to the regression equation to control for error.
iii. If the null hypothesis 4 = 0 is not rejected, then the independent variable X4
has no effect in predicting the dependent variable.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
72. i. A variable whose possible outcomes are coded as a "1" or a "0" is called a
dummy variable.
ii. If the null hypothesis 4 = 0 is not rejected, then the independent variable X4
has no effect in predicting the dependent variable.
iii. A dummy variable is added to the regression equation to control for error.
A. (i), (ii), and (iii) are all correct statements.
B. (i) and (ii) are correct statements but not (iii).
C. (i) and (iii) are correct statements but not (ii).
D. (ii) and (iii) are correct statements but not (i).
E. (i), (ii), and (iii) are all false statements.
73. What can we conclude if the net regression coefficients in the population are not
significantly different from zero?
A. Strong relationship exists among the variables.
B. No relationship exists between the dependent variable and the independent
variables.
C. Independent variables are good predictors.
D. Good forecasts are possible.
74. Hypotheses concerning individual regression coefficients are tested using which
statistic?
A. t-statistic
B. z-statistic

C. 2 (chi-square statistic)
D. H
75. The best example of a null hypothesis for testing an individual regression
coefficient is:
A. H0: 1 = 2 = 3 = 4.
B. H0: 1 = 2 = 3 = 4.
C. H0: 1 = 0.
D. if F is greater than 20.00 then reject.
76. Angela Chou has been asked to investigate the determinants of poverty in
Ontario communities. She collected data on 60 communities from Statistics Canada.
She selected the percentage of poor persons living under the poverty line [Poor
(%)], measured by Low Income Cut-Off, designed by Statistics Canada as a measure
of poverty for a community, as the dependent variable. The independent variables
selected are percent of single families in each community, the unemployment rate
in each community, percent of population in the community holding a bachelor's
degree as their highest level of education attained, and percent of population
holding a High School Diploma as their highest level of education attained. Using
the outputs below for this data set, determine whether Angela should use the model
with the high school data included, or the data without the high school data, and
why.

A. It doesn't matter which she uses, the results are virtually the same in either case.
B. Angela should use the data that includes the high school information, because
more information is always better than less information.
C. Angela should use the data that includes the high school information, because
the calculated F value is lower.
D. Angela should include the high school data because the P-value is 0.977, close to
1.
E. Angela should exclude the high school data because the adjusted R-squared
value is a little higher than in the data that includes the high school information.
77. Angela Chou has been asked to investigate the determinants of poverty in
Ontario communities. She collected data on 60 communities from Statistics Canada.
She selected the percentage of poor persons living under the poverty line [Poor
(%)], measured by Low Income Cut-Off, and designed by Statistics Canada as a
measure of poverty for a community, as the dependent variable. The independent
variables selected are percent of single families in each community, the
unemployment rate in each community, percent of population in the community
holding a bachelor's degree as their highest level of education attained, and percent
of population holding a High School Diploma as their highest level of education
attained. Using the output below, determine which variable Angela should consider
deleting.
A. It doesn't matter which she uses, the results are virtually the same in any case.

B. Angela should delete the high school information, because the P-value is over
0.05.
C. Angela should delete the bachelor's degree information, because the P-value is
close to 0.05.
D. Angela should delete the unemployment rate information because the P-value is
0.00.
E. Angela should exclude the single-family and unemployment information because
the P-value values are 0.
78. A manager at a local bank analyzed the relationship between monthly salary
and three independent variables: length of service (measured in months), gender (0
= female, 1 = male) and job type (0 = clerical, 1 = technical). The following ANOVA
summarizes the regression results:

Based on the hypothesis tests for the individual regression coefficients,

A. all the regression coefficients are not equal to zero.
B. "job" is the only significant variable in the model.
C. only months of service and gender are significantly related to monthly salary.
D. "service" is the only significant variable in the model.
79. A manager at a local bank analyzed the relationship between monthly salary
and three independent variables: length of service (measured in months), gender (0
= female, 1 = male) and job type (0 = clerical, 1 = technical). The following ANOVA
summarizes the regression results:

The results for the variable gender show that,

A. males average $222.78 more than females in monthly salary.
B. females average $222.78 more than males in monthly salary.
C. gender is not related to monthly salary.
D. gender and months of service are correlated.
80. The information below is from the multiple regression analysis computer output
for 28 teams in Major League Baseball. The model is designed to predict wins using
attendance, payroll, batting average, home runs, stolen bases, errors, and team
ERA.

The t-value computed for testing the coefficient "Batg. Avg." is:
A. 112.991.
B. 2.086.
C. 7.438.
D. 2.832.
E. -1.593.
81. When does multicollinearity occur in a multiple regression analysis?

A. Dependent variables are highly correlated.

B. Independent variables are minimally correlated.
C. Independent variables are highly correlated.
D. Independent variables have no correlation.
82. What is it called when the independent variables are highly correlated?
A. Autocorrelation
B. Multicollinearity
C. Homoscedasticity
D. Zero correlation
83. If the correlation between the two independent variables of a regression
analysis is 0.11 and each independent variable is highly correlated to the
dependent variable, what does this indicate?
A. Multicollinearity between these two independent variables.
B. Negative relationship is not possible.
C. Only one of the two independent variables will explain a high percent of the
variation.
D. An effective regression equation.
84. What does the correlation matrix for a multiple regression analysis contain?
A. Multiple correlation coefficients
B. Simple correlation coefficients
C. Multiple coefficients of determination
D. Multiple standard errors of estimate
85. The following correlations were computed as part of a multiple regression
analysis that used education, job, and age to predict income.

Which independent variable has the strongest association with the dependent
variable?
A. Income
B. Age
C. Education
D. Job
86. The following correlations were computed as part of a multiple regression
analysis that used education, job, and age to predict income.

Which independent variable has the weakest association with the dependent
variable?
A. Income
B. Age
C. Education
D. Job

87. The following correlations were computed as part of a multiple regression

analysis that used education, job, and age to predict income.

What is this table called?

A. Net regression coefficients
B. Coefficients of nondetermination
C. Analysis of variance
D. Correlation matrix
88. The information below is from the multiple regression analysis computer output
for 28 teams in Major League Baseball. The model is designed to predict wins using
attendance, payroll, batting average, home runs, stolen bases, errors, and team
ERA.

The diagram above indicates that the multiple regression model has:
A. autocorrelation.
B. multicollinearity.
C. normality.
D. heteroscedasticity.
E. homoscedasticity.
89. The following summary is from home heating costs, using mean outside
temperature as X1 the number of centimetres of insulation as X2, and the presence
of a garage as X3.
Is the presence of the independent variable garage significant in predicting heating
costs, when tested at the 0.05 level of significance?
A. Since the p-value is less than the level of significance, the null hypothesis is
rejected, and so the garage should be included in the analysis.
B. Since the p-value is less than the level of significance, the null hypothesis is
accepted, and so the garage should not be included in the analysis.
C. Since the p-value is more than the level of significance, the null hypothesis is
accepted, and so the garage should not be included in the analysis.
D. Since the p-value is more than the level of significance, the null hypothesis is
rejected, and so the garage should be included in the analysis.
90. The following summary is from home heating costs, using mean outside
temperature as X1 the number of centimetres of insulation as X2, and the presence
of a garage as X3.
Is the presence of the independent variable garage significant in predicting heating
costs, when tested at the 0.01 level of significance?
A. Since the p-value is less than the level of significance, the null hypothesis is
rejected, and so the garage should be included in the analysis.

B. Since the p-value is less than the level of significance, the null hypothesis is
accepted, and so the garage should not be included in the analysis.
C. Since the p-value is more than the level of significance, the null hypothesis is
accepted, and so the garage should not be included in the analysis.
D. Since the p-value is more than the level of significance, the null hypothesis is
rejected, and so the garage should be included in the analysis.
91. It is thought that there are a variety of factors that affect a teacher's salary.
Using the following printout and sample data, determine whether the holding of a
PhD degree is a significant variable when tested at the 5% level of significance.

A. Since the p-value is less than the level of significance, the null hypothesis is
rejected, and so the holding of a PhD should be included in the analysis.
B. Since the p-value is less than the level of significance, the null hypothesis is
accepted, and so the PhD should not be included in the analysis.
C. Since the p-value is more than the level of significance, the null hypothesis is
accepted, and so the PhD should not be included in the analysis.
D. Since the p-value is more than the level of significance, the null hypothesis is
rejected, and so the PhD should be included in the analysis.
92. It is thought that there are a variety of factors that affect a teacher's salary.
Using the following printout and sample data, determine whether the holding of a
PhD degree is a significant variable when tested at the 10% level of significance.

A. Since the p-value is less than the level of significance, the null hypothesis is
rejected, and so the holding of a PhD should be included in the analysis.
B. Since the p-value is less than the level of significance, the null hypothesis is
accepted, and so the PhD should not be included in the analysis.
C. Since the p-value is more than the level of significance, the null hypothesis is
accepted, and so the PhD should not be included in the analysis.
D. Since the p-value is more than the level of significance, the null hypothesis is
rejected, and so the PhD should be included in the analysis.
93. It is thought that there are a variety of factors that affect a teacher's salary.
Using the following printout and sample data, determine whether the holding of a
PhD degree is a significant variable when tested at the 10% level of significance.
X1 is years of teaching experience, x2 is principal's rating and x3 is the presence of
a PhD or not.
A. Since the p-value is less than the level of significance, the null hypothesis is
rejected, and so the holding of a PhD should be included in the analysis.
B. Since the p-value is less than the level of significance, the null hypothesis is
accepted, and so the PhD should not be included in the analysis.

C. Since the p-value is more than the level of significance, the null hypothesis is
accepted, and so the PhD should not be included in the analysis.
D. Since the p-value is more than the level of significance, the null hypothesis is
rejected, and so the PhD should be included in the analysis.
94. It is thought that there are a variety of factors that affect a teacher's salary.
Using the following printout and sample data, determine whether the holding of a
PhD degree is a significant variable when tested at the 1% level of significance.
X1 is years of teaching experience, X2 is principal's rating and x3 is the presence of
a PhD or not.
A. Since the p-value is less than the level of significance, the null hypothesis is
rejected, and so the holding of a PhD should be included in the analysis.
B. Since the p-value is less than the level of significance, the null hypothesis is
accepted, and so the PhD should not be included in the analysis.
C. Since the p-value is more than the level of significance, the null hypothesis is
accepted, and so the PhD should not be included in the analysis.
D. Since the p-value is more than the level of significance, the null hypothesis is
rejected, and so the PhD should be included in the analysis.
95. It has been hypothesized that overall academic success for freshmen at college
as measured by grade point average (GPA) is a function of IQ scores (X1), hours
spent studying each week (X2), and one's high school average (X3). Suppose the
regression equation is:
Y' = -6.9 + 0.055X1 + 0.107X2 + 0.0083X3.
The multiple standard error is 6.313 and R2 = 0.826.
What is the predicted GPA for a student with an IQ of 108, 32 hours spent studying
per week and a high school average of 82?
A. 3.1446
B. 2.9306
C. 0.428
D. 10.0446
E. 13.1892
96. It has been hypothesized that overall academic success for freshmen at college
as measured by grade point average (GPA) is a function of IQ scores (X1), hours
spent studying each week (X2), and one's high school average (X3). Suppose the
regression equation is:
Y' = -6.9 + 0.055X1 + 0.107X2 + 0.0083X3.
The multiple standard error is 6.313 and R2 = 0.826.What will the GPA be if the
number of hours spent studying is 30 the IQ is 108, and the high school average is
82?
A. 3.1446
B. 2.9306
C. 0.428
D. 10.0446
E. 13.1892

97. It has been hypothesized that overall academic success for freshmen at college
as measured by grade point average (GPA) is a function of IQ scores (X1), hours
spent studying each week (X2), and one's high school average (X3). Suppose the
regression equation is:
Y' = -6.9 + 0.055X1 + 0.107X2 + 0.0083X3.
The multiple standard error is 6.313 and R2 = 0.826.Assuming other independent
variables are held constant, what effect on the GPA will there be if the numbers of
hours spent studying per week increases from 32 to 36?
A. 3.1446
B. -0.824
C. +0.428
D. -0.428
E. +0.824
98. It has been hypothesized that overall academic success for freshmen at college
as measured by grade point average (GPA) is a function of IQ scores (X1), hours
spent studying each week (X2), and one's high school average (X3). Suppose the
regression equation is:
Y' = -6.9 + 0.055X1 + 0.107X2 + 0.0083X3.
The multiple standard error is 6.313 and R2 = 0.826.For which independent variable
does a unit change have the least effect on GPA?
A. IQ scores (X1)
B. hours spent studying each week (X2)
C. high school average (X3)
99. It has been hypothesized that overall academic success for freshmen at college
as measured by grade point average (GPA) is a function of IQ scores (X1), hours
spent studying each week (X2), and one's high school average (X3). Suppose the
regression equation is:
Y' = -6.9 + 0.055X1 + 0.107X2 + 0.0083X3.
The multiple standard error is 6.313 and R2 = 0.826.For which independent variable
does a unit change have the greatest effect on the GPA?
A. IQ scores (X1)
B. hours spent studying each week (X2)
C. high school average (X3)
100. It has been hypothesized that overall academic success for freshmen at
college as measured by grade point average (GPA) is a function of IQ scores (X1),
hours spent studying each week (X2), and one's high school average (X3). Suppose
the regression equation is:
Y' = -6.9 + 0.055X1 + 0.107X2 + 0.0083X3.
The multiple standard error is 6.313 and R2 = 0.826. How many dependent
variables are in the regression equation?
A. One
B. Two
C. Three
D. Four
101. It has been hypothesized that overall academic success for freshmen at
college as measured by grade point average (GPA) is a function of IQ scores (X1),

hours spent studying each week (X2), and one's high school average (X3). Suppose
the regression equation is:
Y' = -6.9 + 0.055X1 + 0.107X2 + 0.0083X3.
The multiple standard error is 6.313 and R2 = 0.826.How will a student's GPA be
affected if an additional hour is spent studying each weeknight?
A. Increases by 0.535
B. Decreases by 0.535
C. Increases by 0.107
D. Decreases by 0.107
E. Increases by 0.0083
Twenty-one executives in a large corporation were randomly selected for a study in
which several factors were examined to determine their effect on annual salary
(expressed in $000's). The factors selected were age, seniority, years of college,
number of company divisions they had been exposed to and the level of their
responsibility. A regression analysis was performed using a popular spreadsheet
program with the following regression output:

102. Determine the multiple regression equation. _______________________

A. Y' = 23.004 - 0.031X1 + 0.381X2 + 1.452X3 - 0.089X4 + 3.554X5
B. Y' = -23.004 - 0.031X1 + 0.381X2 + 1.45X3 - 0.089X4 + 3.554X5
C. Y' = 23.004 - 0.031X1 + 0.381X2 + 1.452X3 + 0.089X4 - 3.554X5
D. Y' = 23.004 - 0.031X1 - 0.381X2 - 1.452X3 - 0.089X4 + 3.554X5
E. Y' = -23.004 + 0.031X1 - 0.381X2 - 1.45X3 + 0.089X4 - 3.554X5
103. Which of the following has the most influence on salary--20 years of seniority,
5 years of college or attaining 55 years of age?
A. 20 years of seniority
B. 5 years of college
C. attaining 55 years of age
D. seniority, education and age all have equal influence on salary
104. What is the effect on salary for an increase of one level of responsibility if the
other variables are held constant?
A. +$3,554
B. -$3,554
C. +$833
D. +$8330
105. What is the effect on salary of an increase in age of two years if other variables
are held constant?
A. -$62
B. -$31
C. +$31
D. +$62
106. What is the proportion of the variation in salary accounted for by the set of
independent variables?

A. 91.4%
B. 29.19%
C. 83.3%
D. 54.1%
E. 9.56%
107. What is the value of the denominator in the calculation of the multiple
standard error of estimate?
A. 15
B. 21
C. 6
D. 5
The production of automobile tires in any given year is related to the number of
automobiles produced this year and in prior years. Suppose our econometric model
resulted in the following data.

108. Which variable in the model is the most significant predictor of tire production?
A. X1
B. X2
C. X3
D. X4
E. X5
109. What is the proportion of variation in tires produced by our predictor variables
in the model?
A. 0.69
B. 0.83
C. 0.09
D. 0.67
110. Which variable in the model is the least significant in predicting tire
production?
A. X1
B. X2
C. X3
D. X4
E. X5
111. What is the equation for our model?
A. Y'= -50000 + 5.00X1 + 0.25X2 + 0.67X3 + 2.12X4 + 3.44X5
B. Y'= 0.25X2 + 0.67X3 + 2.12X4 - 3.44X5
C. Y'= 5.00X1 - 0.25X2 - 0.67X3 + 2.12X4 + 3.44X5
D. Y'= 10.4X1 + 0.6X2 + 1.4.X3 + 2.7X4 + 6.5X5
112. How much does tire production increase for every thousand cars produced two
years ago?
A. 670

B. 67
C. 0.67
D. 6.7
113. How much does tire production change for every thousand cars produced three
years ago?
A. 2120
B. 212
C. 21.2
D. 2.12
A real estate agent developed a model to relate a house's selling price (Y) to the
area of floor space (X) and the area of floor space squared (X2). The multiple
regression equation for this model is:
Y = 125 - 3X + X2
where: Y = selling price (times $1,000)
X = square feet of floor space (times 100)
114. What is the y- intercept (a)?
A. $125 000
B. $125
C. $3000
D. $-3000
115. What is the selling price of a house with 1,000 square feet? ______
A. $305 000
B. $125 000
C. $300 000
D. $195 000
116. What is the selling price of a house with 1,500 square feet? ______
A. $305 000
B. $125 000
C. $300 000
D. $1500 000
117. What is the selling price of a house with 2,000 square feet? ______
A. $305 000
B. $125 000
C. $300 000
D. $465 000
118. What is the difference in selling prices of a house with 1,600 square feet and
one with 1,700 square feet?
A. $30 000
B. $3000
C. $363 000
D. $333 000

119. What is the difference in selling prices of a house with 1,700 square feet and
one with 1,800 square feet?
A. $30 000
B. $3000
C. $363 000
D. $32 000
120. What is the difference in selling prices of a house with 1,650 square feet and
one with 1,750 square feet?
A. $30 000
B. $3000
C. $31 000
D. $32 000
121. Twenty-one executives in a large corporation were randomly selected to study
the effect of several factors on annual salary (expressed in $000s). The factors
selected were age, seniority, years of college, number of company divisions they
had been exposed to, and the level of their responsibility. The results of the
regression analysis follow:

Test the hypothesis that the regression coefficient for age is equal to 0 at the 0.05
significance level. Report the critical value, the calculated test-statistic, and your
decision.
A. t-critical = 2.131, t-calculated = -0.169, fail to reject.
B. t-critical = 2.131, t-calculated = -0.183, fail to reject.
C. t-critical = 1.753, t-calculated = -0.169, fail to reject.
D. t-critical = 1.753, t-calculated = -0.169, reject.
122. Twenty-one executives in a large corporation were randomly selected to study
the effect of several factors on annual salary (expressed in $000s). The factors
selected were age, seniority, years of college, number of company divisions they
had been exposed to, and the level of their responsibility. The results of the
regression analysis follow:

Test the hypothesis that the regression coefficient for education is equal to 0 at the
0.05 significance level. Report the critical value, the calculated test-statistic, and
your decision.
A. t-critical = 2.131, t-calculated = 3.752, reject the null hypothesis and conclude
that education and salary are significantly related.
B. t-critical = 2.131, t-calculated = 3.752, fail to reject.
C. t-critical = 1.753, t-calculated = -0.169, fail to reject.
D. t-critical = 1.753, t-calculated = -3.752, reject the null hypothesis and conclude
that education and salary are significantly related.
123. The following graph is used to evaluate two assumptions of a multiple
regression analysis. What are the two assumptions?

A. Linearity and homoscedasticity.

B. Independent variables must be correlated, and residuals are dependent.
C. Independence and correlation.
124. The following graph is used to evaluate an assumption of a multiple regression
analysis. What is the assumption?
A. Normal distribution of residuals
B. Linearity
C. Homoscedasticity
D. Scatter diagram
125. The following graph is used to evaluate an assumption of a multiple regression
analysis. What is the assumption?
A. Normal distribution of residuals
B. Linearity
C. Homoscedasticity
D. Scatter diagram
126. A multiple regression analysis showed the following ANOVA table result.

Based on the information in the ANOVA, what is the decision regarding the global
null hypothesis?
A. The p-value 0.659 is quite large, so we fail to reject the null hypothesis and
conclude that there is no relationship between the dependent variable and the
independent variables.
B. The p-value 0.659 is quite large, so we reject the null hypothesis and conclude
that there is a relationship between the dependent variable and the independent
variables.
C. The p-value, 0.659 is larger than the F value, so we reject the null hypothesis and
conclude that there is no relationship between the dependent variable and the
independent variables.
127. In a multiple regression analysis, the following correlation matrix was
computed.

Which independent variable(s) are highly correlated with the dependent variable?
A. X1
B. X2
C. X3
D. X1 and X4

E. X2 and X4
128. In a multiple regression analysis, the following correlation matrix was
computed.

What does the correlation matrix suggest about the independent variables?
A. X1 and X2 are correlated.
B. No correlation between the independent variables.
C. All 4 independent variables are highly correlated with each other, therefore
multicollinearity exists.
D. X1 and X4.
E. X2 and X4 are correlated as well as X1 and X3; therefore multicollinearity exists.
129. A multiple regression analysis showed the following ANOVA table result.

Based on the information in the ANOVA, how many independent variables were
included in the multiple regression analysis?
A. 1
B. 2
C. 3
D. 4
E. 5
130. A multiple regression analysis showed the following ANOVA table result.
Based on the information in the ANOVA, what is the decision regarding the global
null hypothesis?
A. The p-value 0.001742 is quite small, so we reject the null hypothesis and
conclude that there is a relationship between the dependent variable and at least
one of the independent variables.
B. The p-value 0.001742 is quite large, so we fail to reject the null hypothesis and
conclude that there is a relationship between the dependent variable and the
independent variables.
C. The p-value, 0.001742 is larger than the F value, so we reject the null hypothesis
and conclude that there is no relationship between the dependent variable and the
independent variables.
131. A multiple regression analysis showed the following results of the individual
independent variables.

Which independent variables are significantly related to the dependent variable?

A. X2 and X4 are significantly related to the dependent variable indicated by their
very small p-values.

B. No significant relationship between the independent variables and the dependent

variable.
C. All 4 independent variables are highly correlated with each other, therefore they
are all significantly related to the dependent variable.
D. X1 and X3 are significantly related to the dependent variable indicated by their
large p-values.

132. A multiple regression analysis showed the following results of the individual
independent variables.

In stepwise regression, which independent variable would most likely be added

first?
A. X1
B. X2
C. X3
D. X4