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Midterm - Exam Regression

linear regression

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106 views5 pages

Midterm - Exam Regression

linear regression

Uploaded by

abdoulayem1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Midterm Exam

STA 4300: Applied Linear Regression

Questions 1: Consider the following data set

x y
0.8 1.39
0.47 0.72
0.51 1.55
0.73 0.48
0.36 1.19
0.58 -1.59
0.57 1.23
0.85 -0.65
0.44 1.49
0.42 0.05

Fit a linear regression model treating y as the outcome and X as the regressor.

Questions 2-8 refer to the following situation: Stock Prices, Y, are assumed to be affected by the annual
rate of dividend of stock, X.
A simple linear regression analysis was performed on 20 observations and the results were:

Regression Equation Section


Independent Regression Standard T-Value Prob
Variable Coefficient Error (Ho: B=0) Level
INTERCEPT -7.964633 3.11101359 -2.560 0.0166
X1 12.548580 1.27081204 9.874 0.0001
2. What statistical conclusion should you make at α= 0.05 about the effect of the dividend on average
stock price?
A. Since 11.30869 > α, fail to reject the null hypothesis.
B. Since 12.54858 > α, reject the null hypothesis.
C. Since 0.0166 < α, reject the null hypothesis.
D. Since 0.0001 < α, reject the null hypothesis.
E. Since 0.0001 < α, fail to reject the null hypothesis.

3. How would you interpret the 95% confidence interval for a value of Y given an X value of 2.36?
I am 95% confident that
A. the stock price for a stock with a dividend rate of 2.36% falls between $14.61 and $28.69.
B. the mean stock price for all stocks with a dividend rate of 2.36% falls between $14.61 and $28.69.
C. the variance in stock price for all stocks falls between $14.61 and $28.69.
D. the dividend rate for all stocks falls between $14.61 and $28.69.
E. for each one point increase in dividend rate, the stock price will increase from $14.61 and $28.69

4. Which one of the following assumptions is incorrectly stated?


A. The stock price is normally distributed for any dividend rate.
B. The stock price has the same variability for any dividend rate.
C. The stock price for any dividend rate is not a linear function of dividend rate.
D. The difference between the stock price and the expected stock price
given the dividend rate is independent from company to company.

5. The interpretation of 0.7895, the value of R-square (the coefficient of determination) is:
A. 78.95% of the sample stock prices (around the mean stock price) can be attributed to a linear
relationship with the dividend rate in the population.
B. the mean stock price will be estimated to increase $97.50 for each point increase in the rate.
C. the mean stock price will be increase $78.95 for each point increase in the rate.
D. the stock price will increase $78.95 for each point increase in the rate.
E. 78.95% of the sample variability in stock price (around the mean stock price) can be attributed to a
linear relationship with the dividend rate.

6. What is the estimate of the change in expected stock prices when the dividend rate increases by one
point?
A. 97.50
B. -7.964633
C. This is a parameter not a statistic.
D. 12.54858
E. 5.36546

7. The estimate of the slope will vary from sample to sample, the estimate of the standard deviation of
beta-hat is:
A. 3.36284
B. 3.14983
C. 0.39274
D. 12.54858
E. 1.27081

8. A 95% confidence interval for the average stock price given the rate of return will use the following t
value:
A. 9.874
B. -2.560
C. 2.101
D. 2.045
E. 2.153

9. An agent for a real estate company wishes to use apartment size (in square
feet) to predict monthly rent (in dollars).
A sample of 25 apartments in a particular neighborhood led to the following
output. Use the output to answer the questions below.

a. What is the equation of the estimated regression line?

b. What is the t – statistic for the hypothesis test of the slope?

c. How many degrees of freedom are associated with the test in part (b)?

d. What is the value of R-squared for the data?


e. What percentage of the variation in the observed rents is explained by the
model?

f. What is the degree of freedom of the residuals

g. What is the regression sum of square

h. Use the regression to estimate the monthly rent of a 1300 square foot
apartment in the neighborhood.

i. Interpret the slope of the estimated regression line for this model. Be specific

and include units!

Interpretation:

j. Comment on the
residual plot

10.Complete the anova table


11.Load the cats dataset from MASS package in R. The cats data set included in
the MASS package has three variables with 144 observations.
The two numerical variables, Bwt as the response variable and Hwt as the
predictor are the body weight and the heart weight of the cats
a. Do a scatter plots to allow you to look at the relationship between
two variables. Is there a relationship between the predictor and the
response?
b. How strong is the relationship between the predictor and the
response?
c. Is the relationship between the predictor and the response positive
or negative?
d. What is the predicted Bwt associated with a Hwt of 12?
e. What is the 95% Confidence Interval for the Mean Response associated
with Hwt of 12?
f. What is the 95% Prediction Interval for the Mean Response associated
with Hwt of 12?

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