SMMD: Practice Problem Set 7 (Solutions)

Topics: Multiple Regression

1. (B) The value of R2 always goes up when a nontrivial explanatory variable

is added to a regression model.
Note on (A) : SSE always goes down when a non-trivial explanatory is added
to a regression model.
Note on (C) : We should only conclude that at least some deviation from
this hypothesis occurs. It may not be the case that both are different from
zero. Perhaps only one of them differs from zero.

2. (B) There is a linear relationship between y and at least one of the three
independent variables

3. (C) The adjusted R2 adjusts explanatory power by the degrees of freedom

while R2 does not do a similar adjustment.
4. (B) (0.377*0.377=0.14)

5. (C) is not surprising as Price and Megapixels are correlated.

Note on (A): The p-value is >0.05 so it may not be included.

6. (D) 19.69 + 0.095 * 300 – 1.92 * 1.5 = 45.31

7. (C) that is about 4 units less than the satisfaction of the other customer.

8. (C) That an approximate 90% prediction interval for a new observation

had width of about +/- 22.
This is because the prediction intervals are not reliable when the residuals
are seen to be not normally distributed from normal quantile plot.

9. (B) Total number of observations is n (30 days) and degree of freedom for
the error term is n-k-1 which is equal to 24. The number of explanatory
variables (k) from this expression is 5.

10. (D) SSR=72.18 ; SST = SSR + SSE = 72.18+84.23= 156.41

R2 = 72.18/156.41 = 0.461
11. (B) RMSE with 5 predictors = (84.23/24)^0.5 = 1.873.
RMSE with 8 predictors = 0.88 * 1.873 = 1.648
SSE with 8 predictors = (1.648^2)*(61-8-1) = 141.319
R2 = (SST-SSE)/SST = (300-141.319)/300 = 0.529

12. (B) T scores are computed using the ratio between coefficients and S.E.
The T score (-.0168/.010 = 1.68), at df =36, the p-value is nearly 5%.

13. (C) Here we use Model 2 to make predictions about TOPSPEED:

Predicted TOPSPEED = 96.44 - 0.00792 * 4000 + 0.349 * 200 = 134.6

14. (B) The “overall” relationship is given by the WEIGHT coefficient in

Model 1 (+.00839). Knowing nothing else about 2 cars, the heavier car is
more likely to have the higher TOPSPEED.
The relationship “controlling for horsepower” is given by the WEIGHT
coefficient in Model 2. (-.00792). Holding horsepower constant, the heavier
the car, the lower the predicted value of TOPSPEED. That is, comparing
2 cars with the same value of HORSEPOWER but differing on WEIGHT,
the heavier car is more likely to have the lower TOPSPEED.