MGMT E 5070 DATA MINING AND FORECAST MANAGEMENT

Professor Vaccaro
TERM EXAMINATION , Chapters 4 and 5 ( Partial )
NAME_________________

Solution

True or False
1. T F In regression, an independent variable is sometimes called a response variable.
2.

T F The variable to be predicted is the dependent variable.

3. T F If the significance level for the F-test is high, there is a relationship between
the dependent and independent variables.
4. T F There is no relationship between variables unless the data points lie in a
straight line.
5. T F For statistical tests of significance about the coefficients, the null hypothesis
is that the slope is 1 .
6. T F In regression, there is random error that can be predicted.
7.

T F Error is the difference in the actual values and the predicted values.

8.

T F The regression line minimizes the sum of the squared errors.

9.

T F Summing the error values in a regression model is misleading because

negative errors cancel out positive errors.

10. T F The SSE measures the total variability in the independent variable about the
regression line.
11. T F The SSR indicates how much of the total variability in the dependent variable
is explained by the regression model.
12. T F The coefficient of determination takes on values between -1 and +1.
13. T F The coefficient of determination gives the proportion of the variability in the
dependent variable that is explained by the regression equation.
14. T F Errors are also called residuals.

-215. T F The regression model assumes the errors are normally distributed.
16. T F The errors in a regression model are assumed to have an increasing variance
as the value of the X variable increases.
17. T F If the assumptions of regression have been met, errors plotted against the
independent variable will typically show patterns.
18. T F The standard error of the estimate is also called the variance of the regression.
19. T F An F-test is used to determine if there is a relationship between the dependent
and independent variables.
20. T F The null hypothesis in the F-test is that there is a linear relationship between
the X and Y variables.
21. T F The t distribution approaches the normal distribution when the number of
degrees of freedom increases.
22. T F The regression sum of squares (SSR) can never be greater than the total sum
of squares (SST).
23. T F The coefficient of determination represents the ratio of SSR to SST.
24. T F Data that exhibit an autocorrelation effect violate the regression assumption
of independence.
25. T F The Durbin-Watson Dstatistic is used to check the assumption of normality.
26. T F The confidence interval for the mean of Y is always narrower than the
prediction interval for an individual response Y given the same data set,
X value, and confidence level.
27. T F For a given data set, the confidence interval will be wider for 95% confidence
than for 90% confidence.
28. T F The population mean is used to estimate a confidence interval.

MGMT E 5070 DATA MINING AND FORECAST MANAGEMENT

Professor Vaccaro
TERM EXAMINATION , Chapters 4 and 5 ( Partial )
NAME________________________________________________________________
Multiple Choice
29. The random error in a regression equation:
a. is the predicted error.
b. includes both positive and negative terms.
c. will sum to a large positive number.
d. is used to estimate the accuracy of the slope.
e. is maximized in a least squares regression model.
30. Which of the following statements (are) is not true about regression models?
a. estimates of the slope are found from sample data.
b. the regression line minimizes the sum of the squared errors.
c. the error is found by subtracting the actual data value from the predicted
data value.
d. the dependent variable is the explanatory variable.
e. the intercept coefficient is not typically interpreted.
31. Which of the following equalities is correct?
a. SST = SSR + SSE
b. SSR = SST + SSE
c. SSE = SSR + SST
d. SST = SSC + SSR
e. SSE = Actual Value Predicted Value

-432. The SSE is:

a. a measure of the total variation in Y about the mean.
b. a measure of the total variation in X about the mean.
c. a measure in the variation of Y about the regression line.
d. a measure in the variation of X about the regression line.
e. none of the above.
33. Which of the following statements is true about r2 ( r-squared ) ?
a. it is also called the coefficient of correlation.
b. it is also called the coefficient of determination.
c. it represents the percent of variation in X that is explained by Y.
d. it represents the percent of variation in the error that is explained by Y.
e. it ranges in value from -1 to +1.
34. The coefficient of determination resulting from a particular regression analysis
was 0.85 . What was the slope of the regression line?
a. 0.85
b. 0.85
c. 0.922
d. there is insufficient information to answer the question.
e. none of the above.
35. The coefficient of determination resulting from a particular regression analysis
was 0.85 . What was the correlation coefficient?
a. + 0.5
b. - 0.5
c. + 0.922
d. - 0.922
36. Which of the following is an assumption of the regression model?
a. the errors are independent.
b. the errors are not normally distributed.
c. the errors have a standard deviation of zero.
d. the errors have an irregular variance.
e. the errors follow a cone pattern.

-537. In a good regression model, the residual plot shows:

a. a cone pattern.
b. an arched pattern.
c. a random pattern.
d. an increasing pattern.
e. a decreasing pattern.
38. The mean square error ( MSE ) is:
a. denoted by s .
b. denoted by k .
c. the SSE divided by the number of observations.
d. the SSE divided by the degrees of freedom.
e. none of the above.
39. The SST :
a. measures the total variability in Y about the mean.
b. measures the total variability in X about the mean.
c. measures the variability in Y about the regression line.
d. measures the variability in X about the regression line.
e. indicates how much of the total variability in Y is explained by the regression
model.
40. The Y-intercept ( bo ) represents the:
a. predicted value of Y when X = 0 .
b. change in estimated average Y per unit change in X .
c. predicted value of Y .
d. variation around the sample regression line.
41. The correlation coefficient resulting from a particular regression analysis was 0.25 .
What was the coefficient of determination?
a. 0.5 .
b. -0.5 .
c. 0.0625 .
d. none of the above .

-642. The least squares method minimizes which of the following?

a. SSR
b. SSE
c. SST
d. all of the above.
43. If the Durbin-Watson statistic has a value close to 0 , which assumption is violated?
a. normality of the errors.
b. independence of errors.
c. homoscedasticity.
d. none of the above.
44. If the Durbin-Watson statistic has a value close to 4 , which assumption is violated?
a. normality of the errors.
b. independence of errors.
c. homoscedasticity.
d. none of the above.
45. The standard error of the estimate is a measure of:
a. total variation of the Y variable.
b. the variation around the sample regression line.
c. explained variation.
d, the variation of the X variable.
46. In performing a regression analysis involving two numerical variables, we are
assuming:
a. the variances of X and Y are equal.
b. the variation around the line of regression is the same for each X value.
c. that X and Y are independent.
d. all of the above.

-747. If the plot of residuals is fan shaped, which assumption is violated?

a. normality.
b. homoscedasticity and independence of errors.
c. independence of errors.
d. no assumptions are violated; the graph should resemble a fan.
48. If r = 1.00 , then :
a. all the data points must fall exactly on a straight line with a slope that equals
1.00 .
b. all the data points must fall exactly on a straight line with a negative slope.
c. all the data points must fall exactly on a straight line with a positive slope.
d. all the data points must fall exactly on a horizontal straight line with a zero slope.
49. Testing for the existence of correlation is equivalent to :
a. testing for the existence of the slope ( 1 ) .
b. testing for the existence of the Y-intercept ( o ) .
c. the confidence interval estimate for predicting Y .
d. none of the above.
50. In a simple linear regression problem , r and b1
a. may have opposite signs.
b. must have the same sign.
c. must have opposite signs.
d. are equal.
51. The width of the prediction interval for the predicted value of Y is dependent on :
a. the standard error of the estimate.
b. the value of X for which the prediction is being made.
c. the sample size.
d. all of the above.

-852. In developing a confidence interval estimate for a simple regression model, the
critical value of the t statistic is :
a. t
b. t
c. t
d. t

degrees of freedom.
degrees of freedom.
n-k-1 degrees of freedom.
k degrees of freedom.
n1

n2