QUESTION 2 If a categorical variable is to be included in a multiple regression,
ID: 3173550 • Letter: Q
Question
QUESTION 2
If a categorical variable is to be included in a multiple regression, a dummy variable for each category of the variable should be used, but the original categorical variables should not be sued.
True
False
1 points
QUESTION 3
The adjusted R2 adjusts R2 for:
low correlation
outliers
non-linearity
the number of explanatory variables in a multiple regression model
1 points
QUESTION 4
The coefficients for logarithmically transformed explanatory variables should be interpreted as the percent change in the dependent variable for a 1% percent change in the explanatory variable.
True
False
1 points
QUESTION 5
The residual is defined as the difference between the actual and predicted, or fitted values of the response variable.
True
False
1 points
QUESTION 6
Regression analysis asks:
if there are differences between distinct populations
how several variables depend on each other
if the sample is representative of the population
how a single variable depends on other relevant variables
1 points
QUESTION 7
Which of the following interpretations of the regression coefficients is correct?
If the listed price increases by $1, sales decrease by 0.8255 houses.
If the interest rate increases by 1%, sales decrease by 0.001225, given that prices remain constant.
If the interest rate increases by 1% while holding price constant, sales decrease by 12.25%.
If price increases by $1, sales decrease by 0.8255%, assuming that interest rates remain constant.
1 points
QUESTION 8
True
False
1 points
QUESTION 9
Ch 10 #13 Data file.xlsx
Estimate a simple linear regression model involving shipping cost and package weight. Interpret the slope coefficient of the least squares line.
As the package weight increases by one pound, the shipping cost increases by $1.49 on average.
As the package weight increases by 1.49 lbs, the shipping cost increases by $1 on average.
As the package weight increases by one pound, the shipping cost increases by $0.08.
We cannot determine this effect with this regression as the results are insignificant.
1 points
QUESTION 10
Add another explanatory variable - distance shipped – to the regression from the previous question. Estimate this expanded model. Based on your results, which model would you choose?
The results in the expanded model are more significant than in the first model. Therefore we should choose the second model.
The first model has a higher coefficient for the package weight variable, therefore it should be chosen to fully account for this factor.
The R squared in the expanded model are higher than in the first model. Therefore it fits the data better and we should choose the expanded model.
Both R squared and adjusted R squared in the expanded model are higher than in the first model. Therefore it fits the data better and we should choose the expanded model.
a.low correlation
b.outliers
c.non-linearity
d.the number of explanatory variables in a multiple regression model
Explanation / Answer
QUESTION 2 : If a categorical variable is to be included in a multiple regression, a dummy variable for each category of the variable should be used, but the original categorical variables should not be sued.
Answer : False
QUESTION 3 : The adjusted R2 adjusts R2 for:
Answer : the number of explanatory variables in a multiple regression model
QUESTION 4 : The coefficients for logarithmically transformed explanatory variables should be interpreted as the percent change in the dependent variable for a 1% percent change in the explanatory variable.
Answer : True
QUESTION 5 : The residual is defined as the difference between the actual and predicted, or fitted values of the response variable.
Answer : True
QUESTION 6 : Regression analysis asks:
Answer : how a single variable depends on other relevant variables