Reference no: EM133000529

INIGO MONTOYA'S MULTIPLE CHOICE QUESTIONS

Busy avenging the murder of his father, Inigo Montoya asks you to answer the following questions by circling the best answer(s) for each.

a) If we add one more explanatory variable to a regression model, the new model will have: (circle all that apply)

1) Larger or the same R2 than the old model

2) Larger or smaller R2 than the old model

3) Smaller se than the old model

4) Larger or smaller se than the old model

b) In a regression model with dependent variable Y and explanatory variables X1 and X2, we want: (circle all that apply)

1) Y and X1 to be strongly correlated

2) Y and X2 to be strongly correlated

3) X1 and X2 to be strongly correlated

c) In the Excel output for a regression model with two explanatory variables X1, X2, which is true about Significance F? (circle all that apply)

1) It is the probability that the regression is significant as a whole.

2) It is the probability that the regression result we observed is solely due to chance.

3) It is equal to the p-value for the following hypothesis test: H0: βX1 = 0, Ha: βX1 ≠ 0, where βX1 is the population slope coefficient for variable X1

d) When Inigo uses Excel to run a regression analysis, he believes the intercept and slope coefficients that Excel gives are population parameters (as opposed to sample statistics). This is (circle one):

1) True

2) False

e) Inigo believes that if a regression of Y on X has an R2 of 0.80, then a regression of X on Y will have an R2 of 0.80. This is (circle one):

1) True

2) False