Introduction to Regression Analysis and Correlation

File: Ch12, Chapter 12: Introduction to Regression Analysis and Correlation
True/False
1. Correlation is a measure of the degree of relatedness of variables.
Ans: True
Response: See section 12.1 Correlation
Difficulty: Easy
2. If the correlation coefficient between two variables is -1, it means that the two variables are not
related.
Ans: False
Difficulty: Hard
3. The process of constructing a mathematical model or function that can be used to predict or
determine one variable by another variable is called regression analysis.
Ans: True
Response: See section 12.2 Introduction to Simple Regression Analysis
Difficulty: Easy
4. In regression, the variable that is being predicted is usually referred to as the independent
variable.
Ans: False
Difficulty: Easy
5. In regression, the predictor variable is called the dependent variable.

Ans: False
Difficulty: Easy
6. The first step in simple regression analysis usually is to construct a scatter plot.
Ans: True
Difficulty: Easy
7. The slope of the regression line, y = 21 − 5x, is 5.
Ans: False
Response: See section 12.3 Determining the Equation of the Regression Line
Difficulty: Medium
8. The slope of the regression line, y = 21 − 5x, is 21.
Ans: False
Difficulty: Medium
9. For the regression line, y = 21 − 5x, 21 is the y-intercept of the line.
Ans: True
Difficulty: Medium
10. The difference between the actual y value and the predicted y value found using a regression
equation is called the residual.
Ans: True
Response: See section 12.4 Residual Analysis
Difficulty: Easy
11. Data points that lie apart from the rest of the points are called deviants. .
Ans: False
Difficulty: Medium
12. One of the assumptions of simple regression analysis is that the error terms are exponentially
distributed
Ans: False
Difficulty: Medium
13. In simple regression analysis the error terms are assumed to be independent and normally
distributed with zero mean and constant variance.
Ans: True
Difficulty: Medium
14. One of the major uses of residual analysis is to test some of the assumptions underlying
regression.
Ans: True
Difficulty: Medium
15. The proportion of variability of the dependent variable (y) accounted for or explained by the
independent variable (x) is called the coefficient of correlation.
Ans: False
Response: See section 12.6 Coefficient of Determination
Difficulty: Medium
16. The coefficient of determination is the proportion of variability of the dependent variable (y)
accounted for or explained by the independent variable (x).
Ans: True
Difficulty: Medium
17. In a simple regression the coefficient of correlation is the square root of the coefficient of
determination.
Ans: False
Difficulty: Medium
18. In the simple regression model, y = 21 − 5x, if the coefficient of determination is 0.81, we can
say that the coefficient of correlation between y and x is 0.90.
Ans: False
Difficulty: Hard
19. The range of admissible values for the coefficient determination is −1 to +1.
Ans: False
Difficulty: Medium
20. A t-test is used to determine whether the coefficients of the regression model are significantly
different from zero.
Ans: True
Response: See section 12.7 Hypothesis Tests for the Slope of the Regression Model and Testing
the Overall Model
Difficulty: Medium
21. To determine whether the overall regression model is significant, the F-test is used.
Ans: True
the Overall Model
Difficulty: Medium
22. The F-value to test the overall significance of a regression model is computed by dividing the
sum of squares regression (SSreg) by the sum of squares error (SSerr).
Ans: False
the Overall Model
Difficulty: Medium
Multiple Choice
23. According to the following graphic, X and Y have _________.
130
120
110
Y
100
90
80
70
1400 1600 1800 2000 2200 2400
X
a) strong negative correlation

b) virtually no correlation
c) strong positive correlation
d) moderate negative correlation
e) weak negative correlation
Ans: c
Difficulty: Easy
24. According to the following graphic, X and Y have _________.
130
120
110
Y
100
90
80
70
0 5 10 15 20 25 30
X
a) strong negative correlation

c) strong positive correlation
d) moderate negative correlation
e) weak negative correlation
Ans: b
Difficulty: Easy
25. A cost accountant is developing a regression model to predict the total cost of producing a
batch of printed circuit boards as a function of batch size (the number of boards produced in one
lot or batch). The explanatory variable is ______.
a) batch size
b) unit variable cost
c) fixed cost
d) total cost
e) total variable cost
Ans: a
Difficulty: Easy
batch of printed circuit boards as a function of batch size (the number of boards produced in one
lot or batch). The dependent variable is ______.
a) batch size
c) fixed cost
d) total cost
Ans: d
Difficulty: Easy
batch of printed circuit boards as a linear function of batch size (the number of boards produced
in one lot or batch). The intercept of this model is the ______.
a) batch size
c) fixed cost
d) total cost
Ans: c
Difficulty: Easy
batch of printed circuit boards as a linear function of batch size (the number of boards produced
in one lot or batch). The slope of the accountant’s model is ______.
a) batch size
c) fixed cost
d) total cost
Ans: b
Difficulty: Easy
29. From the following scatter plot, we can say that between y and x there is _______.
800
600
Y
400
200
0
0 20 40
X 60 80
a) perfect positive correlation

c) positive correlation
d) negative correlation
e) perfect negative correlation
Ans: c
Difficulty: Easy
1200
1000
800
Y
600
400
200
0
0 20 40
X 60 80

Ans: d
Difficulty: Easy
40000
30000
20000
10000
Y
0
-10000 0 20 40 60 80
-20000
-30000 X

Ans: b
Difficulty: Easy
32. In the regression equation, y = 75.65 + 0.50x, the slope is _______.

a) 0.50
b) 75.65
c) 1.00
d) 0.00
e) -0.50
Ans: a
Difficulty: Medium
33. In the regression equation, y = 75.65 + 0.50x, the intercept is _______.

a) 0.50
b) 75.65
c) 1.00
d) 0.00
e) -0.50
Ans: b
Difficulty: Medium
34. Consider the following scatter plot and regression line. At x = 17, the residual (error term) is
_______.
600
500
400
Y
300
200
100
0
0 10 20 30 40 50 60 70
X
a) positive
b) zero
c) negative
d) imaginary
e) unknown
Ans: a
Difficulty: Easy
35. For following scatter plot and regression line, at x = 65 the residual is _______.
600
500
400
Y
300
200
100
0
0 10 20 30 40 50 60 70
X
a) positive
b) zero
c) negative
d) imaginary
e) unknown
Ans: c
Difficulty: Easy
36. One of the assumptions made in simple regression is that ______________.

a) the error terms are normally distributed
b) the error terms have unequal variances
c) the model is nonlinear
d) the error terms are dependent
e) the error terms are all equal
Ans: a
Difficulty: Easy
37. One of the assumptions made in simple regression is that ______________.

a) the error terms are exponentially distributed
c) the model is linear
e) the model is nonlinear
Ans: c
Difficulty: Easy
38. The assumptions underlying simple regression analysis include ______________.

a) the error terms are exponentially distributed
c) the model is nonlinear
e) the error terms are independent
Ans: e
Difficulty: Easy
39. The assumption of constant error variance in regression analysis is called _______.
a) heteroscedasticity
b) homoscedasticity
c) residuals
d) linearity
e) nonnormality
Ans: b
Difficulty: Medium
40. The total of the squared residuals is called the _______.

a) coefficient of determination
b) sum of squares of error
c) standard error of the estimate
d) R-squared
e) coefficient of correlation
Ans: b
Response: See section 12.5 Standard Error of the Estimate
Difficulty: Easy
41. A standard deviation of the error of the regression model is called the _______.
a) coefficient of determination
b) sum of squares of error
c) standard error of the estimate
d) R-squared
e) coefficient of correlation
Ans: c
Difficulty: Easy
42. A simple regression model developed for ten pairs of data resulted in a sum of squares of
error, SSE = 125. The standard error of the estimate is _______.
a) 12.5
b) 3.5
c) 15.6
d) 3.95
e) 25
Ans: d
Difficulty: Medium
43. In regression analysis, R-squared is also called the _______.

a) residual
b) coefficient of determination
c) coefficient of correlation
d) standard error of the estimate
e) sum of squares of regression
Ans: b
Difficulty: Easy
44. The numerical value of the coefficient of determination must be _______.

a) between -1 and +1
b) between -1 and 0
c) between 0 and 1
d) equal to SSE/(n-2)
e) between -100 and +100
Ans: c
Difficulty: Easy
45. The numerical value of the coefficient of correlation must be _______.

a) between -1 and +1
b) between -1 and 0
c) between 0 and 1
d) equal to SSE/(n-2)
e) between 0 and -1
Ans: a
Difficulty: Easy
46. For a certain data set the regression equation is y = 21 - 3x. The correlation coefficient
between y and x in this data set _______.
a) must be 0
b) is negative
c) must be 1
d) is positive
e) must be >1
Ans: b
Difficulty: Hard
47. For a certain data set the regression equation is y = 2 + 3x. The correlation coefficient between
y and x in this data set _______.
a) must be 0
b) is negative
c) must be 1
d) is positive
e) must be 3
Ans: d
Difficulty: Hard
48. The coefficient of correlation in a simple regression analysis is = - 0.6. The coefficient of
determination for this regression would be _______.
a) 0.6
b) - 0.6 or + 0.6
c) 0.13
d) - 0.36
e) 0.36
Ans: e
Difficulty: Hard
49. The proportion of variability of the dependent variable accounted for or explained by the
independent variable is called the _______.
a) sum of squares error
b) coefficient of correlation
c) coefficient of determination
d) covariance
e) regression sum of squares
Ans: c
Difficulty: Easy
50. If x and y in a regression model are totally unrelated, _______.

a) the correlation coefficient would be -1
b) the coefficient of determination would be 0
c) the coefficient of determination would be 1
d) the SSE would be 0
e) the MSE would be 0s
Ans: b
Difficulty: Easy
51. If there is perfect negative correlation between two sets of numbers, then _______.
a) r = 0
b) r = -1
c) r = +1
d) SSE=1
e) MSE = 1
Ans: b
Difficulty: Easy
52. A researcher has developed a regression model from fourteen pairs of data points. He wants
to test to determine if the slope is significantly different from zero. He uses a two- tailed test and
 = 0.01. The critical table t value is _______.
a) 2.650
b) 3.012
c) 3.055
d) 2.718
e) 2.168
Ans: c
the Overall Model
Difficulty: Easy
53. A researcher has developed a regression model from fifteen pairs of data points. He wants to
test to determine if the slope is significantly different from zero. He uses a two-tailed test and  =
0.10. The critical table t value is _______.
a) 1.771
b) 1.350
c) 1.761
d) 2.145
e) 2.068
Ans: a
the Overall Model
Difficulty: Easy
54. In a regression analysis if SST = 200 and SSR = 200, r 2 = _________.

a) 0.25
b) 0.75
c) 0.00
d) 1.00
e) -1.00
Ans: d
Difficulty: Easy
55. A manager wishes to predict the annual cost (y) of an automobile based on the number of
miles (x) driven. The following model was developed: y = 1,550 + 0.36x.
If a car is driven 15,000 miles, the predicted cost is ____________.
a) 2090
b) 3850
c) 7400
d) 6950
e) 5400
Ans: d
Response: See section 12.8 Estimation
Difficulty: Medium
miles (x) driven. The following model was developed: y = 1,550 + 0.36x.
If a car is driven 30,000 miles, the predicted cost is _____________.
a) 10,800
b) 12,350
c) 2,630
d) 9,250
e) 10,250
Ans: b
Difficulty: Easy
miles (x) driven. The following model was developed: y = 1,550 + .36x.
If a car is driven 20,000 miles, the predicted cost is ____________.
a) 7,200
b) 5,650
c) 8,750
d) 2,270
e) 6,750
Ans: c
Difficulty: Easy
58. A manager wants to predict the cost (y) of travel for salespeople based on the number of days
(x) spent on each sales trip. The following model has been developed: y = $400 + 120x. If a trip
took 4 days, the predicted cost of the trip is _____________.
a) 480
b) 880
c) 524
d) 2080
e) 1080
Ans: b
Difficulty: Easy
59. A manager wants to predict the cost (y) of travel for salespeople based on the number of days
(x) spent on each sales trip. The following model has been developed: y = $400 + 120x. If a trip
took 3 days, the predicted cost of the trip is _____________.
a) 760
b) 360
c) 523
d) 1560
e) 1080
Ans: a
Difficulty: Easy
60. The following data is to be used to construct a regression model:
x 5 7 4 15 12 9
y 8 9 12 26 16 13
The value of the intercept is ________.

a) 1.36
b) 2.16
c) 0.68
d) 0.57
e) 2.36
Ans: b
Difficulty: Medium
x 5 7 4 15 12 9
y 8 9 12 26 16 13
The value of the slope is ____________.

a) 2.36
b) 2.16
c) 0.68
d) 0.57
e) 1.36
Ans: e
Difficulty: Medium
x 5 7 4 15 12 9
y 8 9 12 26 16 13
The regression equation is _______________.

a) y = 2.16 + 1.36x
b) y = 1.36 + 2.16x
c) y = 0.68 + 0.57x
d) y = 0.57 + 0.68x
e) y = 0.57 - 0.68x
Ans: a
Difficulty: High
63. The following residuals plot indicates _______________.

a) a nonlinear relation
b) a nonconstant error variance
c) the simple regression assumptions are met
d) the sample is biased
e) the sample is random
Ans: b
Difficulty: Easy
64. The following residuals plot indicates _______________.
a) a nonlinear relation
b) a nonconstant error variance
c) the simple regression assumptions are met
d) the sample is biased
e) a random sample
Ans: a
Difficulty: Easy
65. Louis Katz, a cost accountant at Papalote Plastics, Inc. (PPI), is analyzing the manufacturing
costs of a molded plastic telephone handset produced by PPI. Louis's independent variable is
production lot size (in 1,000's of units), and his dependent variable is the total cost of the lot (in
$100's). Regression analysis of the data yielded the following tables.
Coefficients Standard Error t Statistic p-value
Intercept 3.996 1.161268 3.441065 0.004885
x 0.358 0.102397 3.496205 0.004413
Source df SS MS F Se = 0.898
Regression 1 9.858769 9.858769 12.22345 r2 = 0.526341
Residual 11 8.872 0.806545
Total 12 18.73077
Louis's regression model is ________________.

a) y = -0.358 + 3.996x
b) y = 0.358 + 3.996x
c) y = -3.996 + 0.358x
d) y = 3.996 - 0.358x
e) y = 3.996 + 0.358x
Ans: e
Response: See section 12.10 Interpreting the Output
Difficulty: Easy

Intercept 3.996 1.161268 3.441065 0.004885
x 0.358 0.102397 3.496205 0.004413
Regression 1 9.858769 9.858769 12.22345 2
r = 0.526341
Residual 11 8.872 0.806545
Total 12 18.73077
The correlation coefficient between Louis's variables is ________________.

a) -0.73
b) 0.73
c) 0.28
d) -0.28
e) 0.00
Ans: b
Difficulty: Medium

Intercept 3.996 1.161268 3.441065 0.004885
x 0.358 0.102397 3.496205 0.004413
Regression 1 9.858769 9.858769 12.22345 r2 = 0.526341
Residual 11 8.872 0.806545
Total 12 18.73077
Louis's sample size (n) is ________________.

a) 13
b) 14
c) 12
d) 24
e) 1
Ans: a
Difficulty: Easy

Intercept 3.996 1.161268 3.441065 0.004885
x 0.358 0.102397 3.496205 0.004413
Regression 1 9.858769 9.858769 12.22345 2
r = 0.526341
Residual 11 8.872 0.806545
Total 12 18.73077
Using  = 0.05, Louis should ________________.

a) increase the sample size
b) suspend judgment
c) not reject H0:  1 = 0
d) reject H0:  1 = 0
e) do not reject H0:  0 = 0
Ans: d
Difficulty: Medium

Intercept 3.996 1.161268 3.441065 0.004885
x 0.358 0.102397 3.496205 0.004413
Regression 1 9.858769 9.858769 12.22345 2
r = 0.526341
Residual 11 8.872 0.806545
Total 12 18.73077
For a lot size of 10,000 handsets, Louis' model predicts total cost will be _____.
a) $4,031.80
b) $757.60
c) $3,960.20
d) $354.01
e) $1873.077
Ans: b
Difficulty: Medium
70. Abby Kratz, a market specialist at the market research firm of Saez, Sikes, and Spitz, is
analyzing household budget data collected by her firm. Abby's dependent variable is monthly
household expenditures on groceries (in $'s), and her independent variable is annual household
income (in $1,000's). Regression analysis of the data yielded the following tables.

Intercept 39.14942 22.30182 1.755436 0.109712
x 1.792312 0.407507 4.398234 0.001339
Regression 1 16850.99 16850.99 19.34446 r2 = 0.682478
Residual 9 7839.915 871.1017
Total 10 24690.91
Abby's regression model is __________.

a) y = 39.15 + 2.79x
b) y = 39.15 - 1.79x
c) y = 1.79 + 39.15x
d) y = -1.79 + 39.15x
e) y = 39.15 + 1.79x
Ans: e
Difficulty: Easy

Intercept 39.14942 22.30182 1.755436 0.109712
x 1.792312 0.407507 4.398234 0.001339
Regression 1 16850.99 16850.99 19.34446 r2 = 0.682478
Residual 9 7839.915 871.1017
Total 10 24690.91
The correlation coefficient between the two variables in this regression is __________.
a) 0.682478
b) -0.83
c) 0.83
d) -0.68
e) 1.0008
Ans: c
Difficulty: Easy

Intercept 39.14942 22.30182 1.755436 0.109712
x 1.792312 0.407507 4.398234 0.001339
Regression 1 16850.99 16850.99 19.34446 r2 = 0.682478
Residual 9 7839.915 871.1017
Total 10 24690.91
Abby's sample size (n) is __________.

a) 8
b) 10
c) 11
d) 20
e) 12
Ans: c
Difficulty: Easy
Intercept 39.14942 22.30182 1.755436 0.109712
x 1.792312 0.407507 4.398234 0.001339
Regression 1 16850.99 16850.99 19.34446 r2 = 0.682478
Residual 9 7839.915 871.1017
Total 10 24690.91
Using  = 0.05, Abby should ________________.

a) reject H0:  1 = 0
b) not reject H0:  1 = 0
c) increase the sample size
d) suspend judgment
e) reject H0:  0 = 0
Ans: a
Difficulty: Medium

Intercept 39.14942 22.30182 1.755436 0.109712
x 1.792312 0.407507 4.398234 0.001339
Regression 1 16850.99 16850.99 19.34446 r2 = 0.682478
Residual 9 7839.915 871.1017
Total 10 24690.91
For a household with $50,000 annual income, Abby's model predicts monthly grocery
expenditures of ________________.
a) $150.35
b) $50.35
c) $1,959.29
d) $128.65
e) $1286.50
Ans: d
Difficulty: Medium
75. Alan Bissell, market analyst for City Sound Mart, is analyzing the relation between heavy
metal CD sales and the size of the teenage population. He gathers data from six sales districts.
Alan’s dependent variable is annual heavy metal CD sales (in $1,000,000's), and his independent
variable is teenage population (in 1,000's). Regression analysis of the data yielded the following
tables.
Intercept -0.14156 0.292143 -0.48455 0.653331
x 0.105195 0.013231 7.950352 0.001356
Regression 1 3.550325 3.550325 63.20809 r2 = 0.940483
Residual 4 0.224675 0.056169
Total 5 3.775
Alan’s regression model can be written as: __________.

a) y = 7.950352 - 0.48455x
b) y = -0.48455 + 7.950352x
c) y = -0.14156 + 0.105195x
d) y = 0.105195 - 0.14156x
e) y = 0.105195 + 0.14156x
Ans: c
Difficulty: Medium
tables.

Intercept -0.14156 0.292143 -0.48455 0.653331
x 0.105195 0.013231 7.950352 0.001356
Regression 1 3.550325 3.550325 63.20809 r2 = 0.940483
Residual 4 0.224675 0.056169
Total 5 3.775
The numerical value of the correlation coefficient between the CD sales and the size of teenage
population is __________.
a) 0.969785
b) 0.940483
c) 0.224675
d) -0.14156
e) 1.000000
Ans: a
Difficulty: Medium
tables.

Intercept -0.14156 0.292143 -0.48455 0.653331
x 0.105195 0.013231 7.950352 0.001356
Regression 1 3.550325 3.550325 63.20809 r2 = 0.940483
Residual 4 0.224675 0.056169
Total 5 3.775
Alan’s sample size is __________.

a) 2
b) 4
c) 6
d) 8
e) 10
Ans: c
Difficulty: Easy
tables.

Intercept -0.14156 0.292143 -0.48455 0.653331
x 0.105195 0.013231 7.950352 0.001356
Regression 1 3.550325 3.550325 63.20809 r2 = 0.940483
Residual 4 0.224675 0.056169
Total 5 3.775
Using  = 0.05, Alan should ________________.

a) increase the sample size
b) not reject H0:  1 = 0
c) reject H0:  1 = 0
d) suspend judgment
e) reject H0:  0 = 0
Ans: c
Difficulty: Medium
tables.

Intercept -0.14156 0.292143 -0.48455 0.653331
x 0.105195 0.013231 7.950352 0.001356
Regression 1 3.550325 3.550325 63.20809 r2 = 0.940483
Residual 4 0.224675 0.056169
Total 5 3.775
For a sales district with 20,000 teenagers, Alan’s model predicts annual CD sales of
________________.
a) $1,947.08
b) $2,104.04
c) $2,103,900
d) $1,962,340
e) $2,908,089
Ans: d
Difficulty: Medium

Introduction to Regression Analysis and Correlation

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Introduction to Regression Analysis and Correlation

Uploaded by

Copyright:

Available Formats

File: Ch12, Chapter 12: Introduction to Regression Analysis and Correlation

1. Correlation is a measure of the degree of relatedness of variables.

5. In regression, the predictor variable is called the dependent variable.

7. The slope of the regression line, y = 21 − 5x, is 5.

8. The slope of the regression line, y = 21 − 5x, is 21.

9. For the regression line, y = 21 − 5x, 21 is the y-intercept of the line.

23. According to the following graphic, X and Y have _________.

a) strong negative correlation

24. According to the following graphic, X and Y have _________.

a) strong negative correlation

a) perfect positive correlation

a) perfect positive correlation

a) perfect positive correlation

32. In the regression equation, y = 75.65 + 0.50x, the slope is _______.

33. In the regression equation, y = 75.65 + 0.50x, the intercept is _______.

36. One of the assumptions made in simple regression is that ______________.

37. One of the assumptions made in simple regression is that ______________.

38. The assumptions underlying simple regression analysis include ______________.

40. The total of the squared residuals is called the _______.

43. In regression analysis, R-squared is also called the _______.

44. The numerical value of the coefficient of determination must be _______.

45. The numerical value of the coefficient of correlation must be _______.

50. If x and y in a regression model are totally unrelated, _______.

54. In a regression analysis if SST = 200 and SSR = 200, r 2 = _________.

60. The following data is to be used to construct a regression model:

The value of the intercept is ________.

The value of the slope is ____________.

62. The following data is to be used to construct a regression model:

The regression equation is _______________.

63. The following residuals plot indicates _______________.

64. The following residuals plot indicates _______________.

Louis's regression model is ________________.

Coefficients Standard Error t Statistic p-value

The correlation coefficient between Louis's variables is ________________.

Coefficients Standard Error t Statistic p-value

Louis's sample size (n) is ________________.

Coefficients Standard Error t Statistic p-value

Using  = 0.05, Louis should ________________.

Coefficients Standard Error t Statistic p-value

Coefficients Standard Error t Statistic p-value

Abby's regression model is __________.

Coefficients Standard Error t Statistic p-value

Coefficients Standard Error t Statistic p-value

Abby's sample size (n) is __________.

Using  = 0.05, Abby should ________________.

Coefficients Standard Error t Statistic p-value

Alan’s regression model can be written as: __________.

Coefficients Standard Error t Statistic p-value

Coefficients Standard Error t Statistic p-value

Alan’s sample size is __________.

Coefficients Standard Error t Statistic p-value

Using  = 0.05, Alan should ________________.

Coefficients Standard Error t Statistic p-value

You might also like