9. A personneldirector has collected data on their employee’s ownership ofthe co

Question

9.         A personneldirector has collected data on their employee’s ownership ofthe company stock versus years employed with the firm. Belowis a Minitab linear regression output for a sample of 8employees.

The regression equation is Shares = 44 + 38.8 Years

S= 91.48       R-Sq =72.0%     R-Sq(adj) = 67.3%

Analysis of Variance

Source      DF         SS         MS      F     P

Regression    1     129173      129173    15.44 0.008

Error        6      50210        8368

Total        7      179383

a)        Define the independent and dependent variables?

b)        What are the coefficient constants a and b from the regressionequation reported above?  

c)        Calculate the Coefficient of Correlation.

d)        Calculate the Standard Deviation of the dependent variable(Sy).

e)        Is the simple linear regression statistically significant? Why?

Explanation / Answer

a) Shares is the dependent variable. Years is the independentvaraible b)       a=44 and b=38.8       a is the coefficient ofintercept, b is the coefficient of slope c) and d) To calculate these two we need data. e) the simple linear regression is statisticallysignificant, since P-value(=0.008) is less than 0.05.

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