STAT 2011

HANDOUT #4 ANSWERS

1)

Ans:
= 0.9748

2)

Ans:
= 0.3696

3)

Ans:

First question

x Line Fit Plot

y

30
20
10
0
0

10

15

20

25

x
y

Predicted y

Second question
= 16.51 + 0.16
4)

Ans:
= 46.29 + 15.24

5)

Ans:
= 13.50 + 0.88

6)

Ans:
= 15.45 0.71

7)

Ans:
Observation
1
2
3
4

Predicted y
Residuals
18.45819936 -1.4581994
19.91961415 -4.9196141
21.0562701 0.9437299
17.80868167 1.19131833

30

5
8)

19.75723473 4.24276527

Ans
First question
= 2.23 + 0.00025

Observation
1
2
3
4
5
6
7
8

Predicted Price
of Milk (per 2
L)
2.537551595
2.332159231
2.562849923
2.469421445
2.289577887
2.442369768
2.496222644
2.299847506

Residuals
0.1024484
-0.0221592
-0.1128499
0.05057855
-0.0995779
0.10763023
-0.0962226
0.07015249

Second question

Distance from area (Km) Residual Plot

0.15

Residuals

0.1
0.05
0
-0.05

200

400

600

800

1000

-0.1
-0.15

9)

Distance from area (Km)

Ans:

Observation
1
2

Predicted
Business
Bankrupcies
(1,000s)
Residuals
37.49780279 -3.1978028
35.12770632 -0.1277063

1200

1400

1600

3
4
5
6
10)

36.53220793
37.84892819
36.88333333
37.41002144

1.96779207
2.25107181
-1.3833333
0.48997856

Ans:
SSE = 0.06196;
7 = 0.1016

5 residuals
11)

Ans:
SSE = 21.3355;
7 = 2.3095

5 residuals
6 residuals (all of them)
12)

Ans:
SSE = 46.6399;
7 = 3.9429

3 residuals
3.4 =3 residuals (68% of the observations)
13)

Ans:
K = 0.1233

K s too small, only 12.23% of the variability of y is explained by variation in x

14)

Ans:
K = 0.5682

56.82 % of the variability in the price of the milk is explained by variation in the distance of the
milk-producing area
15)

Ans:
K = 0.1834

only 18.34% of the variability of the business Bankruptcies is explained by variation in the firms
births

16)

Ans:
= 2.5555
t-critical with n-2=3 d.f is -3.182. So we cannot reject the null hypothesis that O = 0. That
implies that at 5% level of significance the regression model cannot predict bond rate.

17)

Ans:
= 0.6496
t-critical with n-2=3 d.f. is 5.841. So we cannot reject the null hypothesis that O = 0. That
implies that at 1% level of significance the regression model cannot predict the y variable.

18)

Ans:
= 2.8098
t-critical with n-2=6 d.f is 1.943. So we reject the null hypothesis that O = 0. That implies
that at 10% level of significance the regression model predicts the price of the milk.

19)

Ans:
= 0.9479
t-critical with n-2=4 d.f. is 2.776. So we cannot reject the null hypothesis that O = 0. That
implies that at 5% level of significance the regression model cannot predict the number of
business bankruptcies.

20)

Ans:
= 2.8740
t-critical with n-2=8 d.f is 2.306. So we reject the null hypothesis that O = 0. That implies
that at 5% level of significance the regression model predicts the variable y..