Question

13)-19) A company analyst is interested in the relationship between number of cars sold per month (in 1,000s) and three independent variables: price per gallon of gasoline (X1=Gas, in $), the prevailing interest rate for car loans (x2=Interest, in %), and the car model (x3=model, with X3=1, the car is standard; and X3=0, if the car is luxury). He took a sample of 50 observations and obtained the following output: Coefficients Standard Errort Stat P-value Intercept 96.0744 10.0080 5.60 0.0001 GAS -16.1436 9.3158 -1.73 0.0927 INTEREST -2.3322 0.3624 -6.43 0.0001 MODEL 14.4222 1.5869 9.09 0.0001 At the 0.01 level of significance, what conclusion should we draw regarding the inclusion of INTEREST in the regression model? The INTEREST variable is not significant in explaining the sales and should be included in the model because its p value is more than 0.01. The INTEREST variable is significant in explaining the sales and should be included in the model because its p value is less than 0.01. The INTEREST variable is not significant in explaining the sales and should be included in the model because its p value is less than 0.01. The INTEREST variable is significant in explaining the sales and should be included in the model because its p value is more than 0.01. QUESTION 18 13)-19) A company analyst is interested in the relationship between number of cars sold per month (in 1,000s) and three independent variables: price per gallon of gasoline (x1=Gas, in S), the prevailing interest rate for car loans (x2=Interest, in %), and the car model (x3-model, with X3=1, i the car is standard, and X3=0, if the car is luxury). He took a sample of 50 observations and obtained the following output: Coefficients Standard Errort Stat P-value Intercept 96.0744 10.0080 5.60 0.0001 GAS -16.1436 9.3158 -1.73 0.0927 INTEREST -2.3322 0.3624-6.43 0.0001 MODEL 14.4222 1.5869 9.09 0.0001 *to The 99% confidence interval estimate for the slope of INTEREST is from -3.2672 to -1.3972 -3.2057 to -1.4587 1.3584 to 3.3060 -3.3060 to -1.3584

Answer 1

13) answer option(b)

the interest variable is significant in explaining the sales and should be included in the model because the p-value is less than 0.01.

13) the 99% confidence interval for slope of interest

= (-3.3060,-1.3584)

answer option(d)

13) if we want to test whether the coefficient on gas is significantly different from zero .the value of test statistics

= -1.73

answer option(b)