Short answer questions.
a. Agree or Disagree (and justify your answer): If the distribution of error term u in a population regression model is not normal, then the usual t-statistic is useless.
b. Agree or Disagree (and justify your answer): If you add an independent variable to a multiple regression model and the R2 value rises, this indicates that adding the variable to the model was a good idea.
c. A model to explain the standardized outcome on a final exam (stndfnl) in terms of percentage of classes attended (atndrte) and prior college grade point average (priGPA) is:
stndfnl = 0 + 1 atndrte + 2 priGPA + 3 atndrte * priGPA + u.
If the value of 3 is positive, what does this tell us about the effect of prior grade point average on the final exam performance of a student?
Designing a Multiple Regression Analysis
Multiple regression analysis can be used to analyze statistical relationships among variables. It is important that regression models be well designed and carefully interpreted to ensure that maximum information is gained about the relationships.
Answer and Explanation:
(a.) Disagree. Even if the distribution of the population variable in not normally distributed, the t-statistic can still be valid owing to the...
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from Business Analysis TrainingChapter 3 / Lesson 7
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