1.

Sample of 30 students minutes expense in Facebook per day:

15,120,180,420,60,100,240,300,40,10,50,60,60,60,45,70,75,15,60,120,180,200,12
0,90,80,130,120,120,

180,100

Here,

a) Mean;

̅
X̅=
100+15+120+180+ 420+ 60+100+240+300+ 40+10+50+60+ 60+60+ 45+ 70+75+15+60+120+180+ 200+12
30

=3420/30

=114

b) Median,

Ascending the data from smallest to largest;

10,15,15,40,45,50,60,60,60,60,60,70,75,80,90,100,100,120,120,120,120,120,130,1
80,180,180,200,240,300,420
n+1 30+1
Even number :( 2 ) = 2
=15.5

90+100
= 95
2

c) Mode:

120 is the mode. Because it has highest frequency.

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 2. Multiple Regression:
Serial No. Monthly Profit (Y) Per day sales (Taka) Year of experience (X2)
(X1)

1 20000 8000 6

2 20000 6000 4

3 30000 11000 6

4 25000 7000 3

5 35000 10000 7

6 40000 12000 8

7 35000 10000 5

8 25000 8000 4

9 42000 12000 6

10 40000 10000 5

11 13000 3000 4

12 11500 1500 1

13 14000 2000 7

14 24000 4000 10

15 11500 2000 4

16 14000 3000 7

17 13000 2500 1

18 27000 5000 12

19 12000 2500 6

20 13000 2500 3

21 18000 8000 5

22 12000 5500 2

23 28000 10000 3

2
24 13000 6000 5

25 14000 7000 4

26 13500 5000 4

27 19000 8000 3

28 36000 12000 6

29 12000 6000 2

30 17000 8500 3

It is believed that Monthly profit of a vegetable seller is affected by per day sale and year of
experience. Results of the multiple regression equation of Monthly profit on per day sale and
year of experience are given below:

a) Develop the Hypothesis

b) Find the equation of regression and Interpret.

c) Estimate the relationship among the variables in relative terms

d) Assess the explanatory power of the independent variables

e) Assess the significance of the results

f) Ascertain whether there is a problem of Multicollinearity.

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 a) Developing The hypothesis:

1st hypothesis:

Ho1 =There is No relation between Monthly profit and per day sales

H1 =There is a relation between Monthly profit and per day sales

2nd hypothesis:

H02=There is no relationship between monthly profit and year of experience

H2=There is relationship between monthly profit and year of experience

b) Multiple Regression Equation:

The required equation is, y`=a+b1X1+b2X2

Where, Y=Dependent Variable (Monthly profit)

X1=Independent Variable-1 (Per day sale)

X2=Independent Variable-2 (Year of experience)

From the coefficient table we find the values of a, b1 and b2. The Desired equation can be written
as: y`= 118.72+2.33X1+1244.39X2

b1=2.33 indicates that when per day sales increases by 1 taka then the mean increase in monthly
profit Taka 2.33 while other variables are held constant.

b2=1244.39 indicates that when year of experience increases by 1 year then the mean increase
in monthly profit Taka 1244.39 while other variables are held constant.

c) Assessing the relationship in relative Term:

The Relationship among the variables in relative terms can be estimated with the help of
coefficient of multiple correlation (r).

R=0.89 indicates that there is a strong positive correlation among three variables (monthly profit,
per day sale & year of experience).

d) Assessing the Explanatory Power of Independent Variables:

The explanatory power of the independent variables can be assessed with the help of coefficient
of multiple determination (R2) [Adjusted]

Adjusted R2=0.77 indicates that around 77 % of the variation in the dependent variable can be
explained by the total variation in independent variables of per day sale & year of experience).

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 e) Assessing the significance of the result:

If the p-value of slope coefficient is equal or less than 5% (0.05) then the relationship between
dependent and independent variable is statistically significant.

If significance of F (p value of F) is equal or less than 5% (0.05) then the overall model is
statistically significant. [ANOVA Table]

From the coefficient table, we can say that the slope coefficient of per day sale is not statistically
significant at 5% level. [3.3>0.05].

So, we can’t reject our null hypothesis. That means, there is no relationship between per day sale
and monthly profit.

From the coefficient table, we can say that the slope coefficient of year of experience is
statistically significant at 5% level. [0.002<0.05].

So, we can reject our null hypothesis. That means, there is a relationship between year of
experience and monthly profit.

From the ANOVA table, F statistic implies that the overall regression model is not statistically
significant at 5% level (1.06>0.05). So, overall the model is not statistically significant.

f) Assessing the problem of Multicollinearity:

i) Correlation coefficients between the independent variables may be higher than the coefficient
between dependent and any other independent variables

r (X1,X2)= 0.165 < r (Y,X1)= 0.831 No Multicollinearity problem

r (X1,X2)= 0.165 < r (Y,X2)= 0.435 No Multicollinearity problem

ii) Correlation coefficient between the independent variables is greater than 0.80

r (X1,X2)= 0.165 < 0.80 No Multicollinearity problem

Monthly profit (Y) Per day sale (X1) Year of experience (X2)

Monthly profit (Y) 1

Per day sale (X1) 0.831955 1

Year of experience (X2) 0.435754 0.165321 1