Pir Mehr Ali Shah ARID AGRICULTURE UNIVERSITY University Institute of Management Sciences

Mid Term Exam Fall 2011 MGT 756: Data Analysis and Decision Making 3(3-0) Time Allowed: 1 Hour 30 Minutes

Q1

Weekly observation on receipts, price and advertising expenditure for the Honda Company.

Week Receipts (tr) Price (p) Advertising (a) 1 123.1 1.92 12.4 2 124.3 2.15 9.9 3 89.3 1.67 2.4 4 141.3 1.68 13.8 5 112.8 1.75 3.5 6 108.1 1.55 1.8 7 143.9 1.54 17.8 8 124.2 2.10 9.8 9 110.1 2.44 8.3 10 111.7 2.47 9.8

Where 1.140 (XX)-1 = -0.539 -0.0043 -0.539 0.276 -0.0043 -0.0014

-0.0014 0.0007

6256.80 XY = 12521.30 64389.39 R2 = 0.35 Var(0) = 42.02 Var (1)= 10.18

Var(2)= 0.02

Y= 0+1X1+2X2+i For the given Model a. b. c. d. e. Estimate the regression equation and interpret your results Find 95% confidence interval for (2) and Interpret it. Test the hypothesis at 5% level of significance 1=0 and interpret it. Standard Error of Estimation is 0.34 interpret it. What would be the receipt if price is 119.6 and advertisement expenditure is 12.5. (12) Q2 Suppose that you estimate the following tow regression modules (t-statistics in parenthesis). Yt= 0.453+0.014X1+i , R2 =0.528 , d=0.825 Yt= 0.479+0.011X1-0.012Xt+1
Are there any signs of autocorrelation in the model? If there is autocorrelation in one of two models what is cause of autocorrelation? Explain the draw backs of Durban Watson test. What alternative test can be used? (6)

OR
Answer the following 1. 2. 3. 4. 5. 6. 7. 8. R2 and adjusted R2. What do you mean by linear in parameter? Write down the techniques of estimating the population Parameter. BLUE stands for and discuss it. The distribution of error terms is.. For testing H0 = 1 = 2 = 3..k=0 which test you will recommend? Write down the distribution of (1) Make first two column of ANOVA of the model Y = 0+1X1+ What is simple correlation? How does it measure? What is its range and interpret it.

9. For the model Y = 0+1X1+ and R2 =81, what is correlation coefficient in this case? Interpret. (6)