Quantitative Methods - Regression Analysis

For a normal random variable approximately 68% of all outcomes fall within:

• one standard deviation of the mean.

• two standard deviation of the mean.

• three standard deviation of the mean.

Homoskedasticity is best described as the situation in which the variance of the

residuals of a regression is:

• zero.

• normally distributed.

• constant across observations.

The variable SHIFT is best described as:

• an indicator variable.

• a dependent variable.

• a continuous variable.

The interpretation of the intercept is the mean of the annual growth rate of the

money supply:

• over the enter entire period.

• after the shift in policy.

• before the shift in policy.

The interpretation of the slope is the:

• change in the annual growth rate of the money supply per year.

• average annual growth rate of the money supply after the shift in policy.

• difference in the average annual growth rate of the money supply from

  before to after the shift in policy.

Testing whether there is a change in the money supply growth after the shift in

policy, using a 0.05 level of significance, we conclude that there is:

• sufficient evidence that the money supply growth changed.

• not enough evidence that the money supply growth is different from zero.

• not enough evidence to indicate that the money supply growth changed.

The coefficient of determination is closest to:

• 0.7436.

• 0.8261.

• 0.8623.

The correlation between X and Y is closest to:

• −0.7436.

• 0.7436.

• 0.8623.

If the ratio of net income to sales for a restaurant is 5%, the predicted ratio of

cash flow from operations (CFO) to sales is closest to:

• −4.054.

• 0.524.

• 4.207.

Is the relationship between the ratio of cash flow to operations and the ratio of

net income to sales significant at the 0.05 level?

• No, because the R2 is greater than 0.05

• No, because the p-values of the intercept and slope are less than 0.05

• Yes, because the p-values for F and t for the slope coefficient are less than

  0.05