Problem 7-11 The American Association of Individual Investors (AAII) On-Line Dis
ID: 3305320 • Letter: P
Question
Problem 7-11
The American Association of Individual Investors (AAII) On-Line Discount Broker Survey polls members on their experiences with electronic trades handled by discount brokers. As part of the survey, members were asked to rate their satisfaction with the trade price and the speed of execution, as well as provide an overall satisfaction rating. Possible responses (scores) were no opinion (0), unsatisfied (1), somewhat satisfied (2), satisfied (3), and very satisfied (4). For each broker, summary scores were computed by computing a weighted average of the scores provided by each respondent. A portion the survey results follow.
What is the coefficient of determination?
Coefficient of Determination:____________
Please provide your multiple regression output for this problem. There is no need to include any discussion here. but I do want to seeing your actual regression output in an Excel file.
Brokerage Satisfaction with
Trade Price Satisfaction with
Speed of Execution Overall Satisfaction with
Electronic Trades AA 3.3 3.1 3.4 BB 3.2 3.3 3.3 CC 3.1 3.3 4 DD 2.9 3.5 3.7 EE 2.8 3.2 2.9 FF 2.4 3.2 2.7 GG 2.6 3.8 2.8 HH 2.4 3.8 3.6 II 2.6 2.6 2.6 JJ 2.3 2.7 2.3 KK 3.7 4 4 LL 2.5 2.5 2.5 MM 3 3 3 NN 4 1 2
Explanation / Answer
a)
y^ = -0.91045 + 0.56992 * x1 + 0.75106*x2
coefficient of determination = r^2 =
b) if p-value < level of significance , the variable is significant
since p-value of x1 = 0.011 < 0.05 , x1 is significant
p-value of x2 = 0.000113 < 0.05 ,x2 is also significant
c)
b1 = 0.5699 , this means if we increase x1 by 1 unit , the increase in y will be b1 (0.5699) units
similarly if we increase x2 by 1 unit , increase in y will be b2 units ,that is 0.7510
yes the relationships indicated by these estimates are same as what we would expect , (increasing)
as satisfaction with Trades is direct relation with price and speed
post last three parts again , in d) part yu just have to use estimated regression and put the values ofx1 and x3, but i think it is missing , cut as the column is large.
SUMMARY OUTPUT Regression Statistics Multiple R 0.874619606 R Square 0.764959456 Adjusted R Square 0.722224812 Standard Error 0.329926119 Observations 14 ANOVA df SS MS F Significance F Regression 2 3.896922029 1.948461014 17.90022 0.000348 Residual 11 1.197363685 0.108851244 Total 13 5.094285714 Coefficients Standard Error t Stat P-value Lower 95% Intercept -0.910453889 0.773290321 -1.177376549 0.263892 -2.61245 Trade Price 0.569917585 0.188841927 3.017961081 0.011698 0.154279 Speed of Execution 0.751016674 0.128693643 5.835693636 0.000113 0.467764