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Regression Analysis: Price versus Mileage, Liter Analysis of Variance Source DF

ID: 3156910 • Letter: R

Question

Regression Analysis: Price versus Mileage, Liter

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 2 25823830697 12911915348 196.48 0.000

Mileage 1 1381011542 1381011542 21.02 0.000

Liter 1 24218240322 24218240322 368.54 0.000

Error 801 52637552164 65714797

Lack-of-Fit 799 52623358855 65861525 9.28 0.102

Pure Error 2 14193309 7096655

Total 803 78461382861

Model Summary

S R-sq R-sq(adj) R-sq(pred)

8106.47 32.91% 32.75% 32.32%

Coefficients

Term Coef SE Coef T-Value P-Value VIF

Constant 9427 1095 8.61 0.000

Mileage -0.1600 0.0349 -4.58 0.000 1.00

Liter 4968 259 19.20 0.000 1.00

Regression Equation

Price = 9427 - 0.1600 Mileage + 4968 Liter

Regress Price on Mileage and Liter. Call this Model 1. This regression does not seem to satisfy one of the assumptions of the regression model. What assumption is violated?

The residuals are not normally distributed.

The regression coefficients are not significant.

Price is not correlated with either Mileage or Liter.

The mean of the error term (the residual) is not equal to zero.

A)

The residuals are not normally distributed.

B)

The regression coefficients are not significant.

C)

Price is not correlated with either Mileage or Liter.

D)

The mean of the error term (the residual) is not equal to zero.

Explanation / Answer

c) Price is not correlated with either Mileage or Liter.