AB1202 – Statistics and Quantitative Methods In-Lecture Exercise Solutions

AB1202 – STATISTICS AND QUANTITATIVE METHODS

In-Lecture Exercise (ILE) Solutions (Week 11)
Lecture 11 – Non-Linear Regression

Q1. Which of the following statement best describes non-linear regression?

(a) Non-linear regression is generally able to match data pattern more readily
than linear regression [CORRECT]
(b) We do not use model significance test for non-linear regression models
(c) Non-linear regression explains the causes and effects of reality much better
than linear regression

Q2. Consider the series of response data values observed for random variable Y: 1000,
600, 50, 2 when the explanatory variable X was 4, 3, 2, 1 respectively. Which of the
following function provides the best transformation of these Y values towards a straight line?
(a) y^2
(b) ln(y) [CORRECT]
(c) sqrt(y)

Q3. Which of the following is true?

(a) We can only transform response variable Y’s values and code explanatory
variables
(b) We can transform any variable in a model, but can only encode explanatory
variables
(c) We can transform and encode any and all variables in a given model
[CORRECT]

Q4. An exponential regression model in the form of y = (2.1)(1.5 ^ x)(3.2 ^ v), where x
and v are explanatory variables’ values, and y is the response variable. What is a correct
interpretation of the base value 1.5?
(a) Every unit increase in x will lead to an average of 1.5 times increase in the
value of y, all other variables being held constant [CORRECT]
(b) Every unit increase in x will lead to an average increase in 1.5 units of y, all
other variables being held constant
(c) Every unit change in x will lead to an average change in 1.5 units of y, all
other variables being held constant

Q5. An exponential regression model in the form of y = (b0)(b1 ^ x)(b2 ^ u)(b3 ^ v)(b4 ^
w), where x, u, v and w are explanatory variables’ values, was obtained from a sample size
of 15. The numerator and denominator degrees of freedom in the model significance test for
this exponential model are:
(a) numerator df = 5, denominator df = 11
(b) numerator df = 4, denominator df = 15
(c) numerator df = 4, denominator df = 10 [CORRECT]

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AB1202 – Statistics and Quantitative Methods In-Lecture Exercise Solutions

Q6. Consider the set of simultaneously observed pairs of data: Y= 5, 9, 8, 13, and X=1,
3, 4, 6. If a power index regression model, y = (b0)(x1 ^ b1), is desirable, use your calculator
to obtain the values for b0 and b1.
(a) b0 = 1.5942, b1 = 0.4850
(b) b0 = 4.9246, b1 = 0.4850 [CORRECT]
(c) b0 = 4.9246, b1 = 1.6241

Q7. A power index regression model involving one explanatory variable X was obtained
as follows: y = (5.2) (x ^ 3.15). The best way interpret the constant 3.15 in the following
choices is:
(a) Each increase in unit value of x leads to an increase in 3.15 units of y on
average
(b) Every unit increase in value of x leads to an average increase in 315 percent
of value of y.
(c) Every doubling of x leads to an increase in 8.8766 times, on average, the
value of y [CORRECT]

Q8. In a Reuter’s report published on 2016 Oct 25 entitled “Asia stocks slide after Wall
Street losses, oil drops on glut concerns”, it was reported that “It (US Dollar) hit its highest
level since Jan 2 on Tuesday as traders saw a more than 78 percent chance of an interest
rise hike by the Federal Reserve in December, according to CME Group’s FedWatch data.”
Find the logit of the event described by the sentence.
(a) 1.2657 [CORRECT]
(b) -0.8251
(c) 3.5455

Q9. After processing a set of data, R gave a logistic regression model of y = -3.8 + 1.6 x.
What is the predicted probability of a success event happening when x = 3.5?
(a) 1.8
(b) 0.8581 [CORRECT]
(c) 0.6429

Q10. A logistic regression from R produced a Null Deviance of 63.592 on 37 degree of

freedom, and a Residual Deviance of 59.331 on 36 degree of freedom. Based on this result,
was the logistic regression model significant at 2.5%?
(a) Yes, reject null hypothesis and conclude that logistic model is significant at
2.5%
(b) No, do not reject null hypothesis and conclude that logistic model is NOT
significant at 2.5% [CORRECT]
(c) Not enough information was provided to make a conclusion.

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