Chapter 12 Questions
Chapter 12 Questions
MULTIPLE CHOICE
1. In a regression analysis, the error term is a random variable with a mean or expected value of
a. zero
b. one
c. any positive value
d. any value
6.The model developed from sample data that has the form of (y-estimated=b0+b1x) is known
as
a. regression equation
b. correlation equation
c. estimated regression equation
d. regression model
a. b1 is the slope
b. b1 is the intercept
c. b0 is the slope
d. None of these alternatives is correct.
16.A regression analysis between sales (Y in $1000) and advertising (X in dollars) resulted in the following
equation
= 30,000 + 4 X
22.Larger values of r2 imply that the observations are more closely grouped about the
a. average value of the independent variables
b. average value of the dependent variable
c. least squares line
d. origin
23.In a regression analysis, the coefficient of determination is 0.4225. The coefficient of correlation in this
situation is
a. 0.65
b. 0.1785
c. any positive value
d. any value
24.In a regression analysis, the coefficient of correlation is 0.16. The coefficient of determination in this
situation is
a. 0.4000
b. 0.0256
c. 4
d. 2.56
25.In simple linear regression analysis, which of the following is not true?
a. The F test and the t test yield the same conclusion.
b. The F test and the t test may or may not yield the same conclusion.
c. The relationship between X and Y is represented by means of a straight line.
d. The value of F = t2.
26.Correlation analysis is used to determine
a. the equation of the regression line
b. the strength of the relationship between the dependent and the independent variables
c. a specific value of the dependent variable for a given value of the independent variable
d. None of these alternatives is correct.
27.In a regression and correlation analysis if r2 = 1, then
a. SSE must also be equal to one
b. SSE must be equal to zero
c. SSE can be any positive value
d. SSE must be negative
29.In a regression analysis, the regression equation is given by y = 12 - 6x. If SSE = 510 and SST = 1000,
then the coefficient of correlation is
a. -0.7
b. +0.7
c. 0.49
d. -0.49
30.In a regression analysis if SSE = 200 and SSR = 300, then the coefficient of determination is
5
a. 0.6667
b. 0.6000
c. 0.4000
d. 1.5000
33.Regression analysis was applied between demand for a product (Y) and the price of the product (X), and
the following estimated regression equation was obtained.
= 120 - 10 X
Based on the above estimated regression equation, if price is increased by 2 units, then demand is
expected to
a. increase by 120 units
b. increase by 100 units
c. increase by 20 units
d. decease by 20 units
34.The coefficient of correlation
a. is the square of the coefficient of determination
b. is the square root of the coefficient of determination
c. is the same as r-square
d. can never be negative
35.If the coefficient of correlation is a positive value, then the regression equation
a. must have a positive slope
b. must have a negative slope
c. could have either a positive or a negative slope
d. must have a positive y intercept
36.If the coefficient of correlation is 0.8, the percentage of variation in the dependent variable explained by
the variation in the independent variable is
a. 0.80%
b. 80%
c. 0.64%
d. 64%
37.In regression and correlation analysis, if SSE and SST are known, then with this information the
6
38.In regression analysis, if the independent variable is measured in pounds, the dependent variable
a. must also be in pounds
b. must be in some unit of weight
c. cannot be in pounds
d. can be any units
39.If there is a very weak correlation between two variables, then the coefficient of determination must be
a. much larger than 1, if the correlation is positive
b. much smaller than -1, if the correlation is negative
c. much larger than one
d. None of these alternatives is correct.
40.SSE can never be
a. larger than SST
b. smaller than SST
c. equal to 1
d. equal to zero
41.If the coefficient of correlation is -0.4, then the slope of the regression line
a. must also be -0.4
b. can be either negative or positive
c. must be negative
d. must be 0.16
42.If the coefficient of correlation is a negative value, then the coefficient of determination
a. must also be negative
b. must be zero
c. can be either negative or positive
d. must be positive
= 60 - 8X
52.Regression analysis was applied between sales (in $1000) and advertising (in $100) and the following
regression function was obtained.
= 500 + 4 X
Based on the above estimated regression line if advertising is $10,000, then the point estimate for sales
(in dollars) is
a. $900
b. $900,000
c. $40,500
d. $505,000
53.The coefficient of correlation
a. is the square of the coefficient of determination
b. is the square root of the coefficient of determination
c. is the same as r-square
d. can never be negative
54.If the coefficient of correlation is 0.4, the percentage of variation in the dependent variable explained by
the variation in the independent variable
a. is 40%
b. is 16%.
c. is 4%
d. can be any positive value
55.In regression analysis if the dependent variable is measured in dollars, the independent variable
a. must also be in dollars
b. must be in some units of currency
c. can be any units
d. cannot be in dollars
56.If there is a very strong correlation between two variables then the coefficient of determination must be
a. much larger than 1, if the correlation is positive
b. much smaller than -1, if the correlation is negative
c. any value larger than 1
d. None of these alternatives is correct.
= 9 - 3X
The above equation implies that if the price is increased by $1, the demand is expected to
a. increase by 6 units
b. decrease by 3 units
c. decrease by 6,000 units
d. decrease by 3,000 units
59.In a regression analysis if SST = 4500 and SSE = 1575, then the coefficient of determination is
a. 0.35
b. 0.65
c. 2.85
d. 0.45
60.Regression analysis was applied between sales (in $10,000) and advertising (in $100) and the following
regression function was obtained.
= 50 + 8 X
Based on the above estimated regression line if advertising is $1,000, then the point estimate for sales
(in dollars) is
a. $8,050
b. $130
c. $130,000
d. $1,300,000
61.If the coefficient of correlation is a positive value, then
a. the intercept must also be positive
b. the coefficient of determination can be either negative or positive, depending on the value
of the slope
c. the regression equation could have either a positive or a negative slope
d. the slope of the line must be positive
62.If the coefficient of determination is 0.9, the percentage of variation in the dependent variable explained by
the variation in the independent variable
a. is 0.90%
b. is 90%.
c. is 81%
d. 0.81%
63.Regression analysis was applied between sales (Y in $1,000) and advertising (X in $100), and the
following estimated regression equation was obtained.
= 80 + 6.2 X
Based on the above estimated regression line, if advertising is $10,000, then the point estimate for
sales (in dollars) is
a. $62,080
b. $142,000
c. $700
10
d. $700,000