If the coefficient of correlation is -0.60, then the coefficient of determination is:
a. -0.60
b. -0.36
c. 0.36
d. 0.77
C
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It is not necessary to have a process in control when establishing control limits
Indicate whether the statement is true or false
Normative economics:
a. is not based on underlying value judgments. b. makes recommendations to achieve efficient outcomes. c. establishes cause-and-effect relationships between economic variables. d. makes “if…then” type statements and checks them against the facts.
A researcher wants to examine how the remaining balance on $100,000 loans taken 10 to 20 years ago depends on whether the loan was a prime or subprime loan. He collected a sample of 25 prime loans and 25 subprime loans and recorded the data in the following variables:Balance = the remaining amount of loan to be paid off (in $),Time = the time elapsed from taking the loan,Prime = a dummy variable assuming 1 for prime loans, and 0 for subprime loans.The regression results obtained for the models:Model A: Balance = ?0 + ?1Prime + ?Model B: Balance = ?0 + ?1Time + ?2Prime + ?3Time × Prime + ?Model C: Balance = ?0 + ?1Prime + ?2Time × Prime + ?,are summarized in the following table.VariableModel AModel BModel CIntercept88,020 (t = 77.89)90,269
(t = 24.35)88,020 (t = 81.19)TimeN/A?148 (t = ?0.64)N/APrime?18,000 (t = ?11.26)-28,493 (t = ?5.36)?26,244 (t = ?6.66)Time × PrimeN/A662 (t = 2.03)514 (t = 2.27) SSE1,532,480,0001,369,126,0911,381,128,299R20.72540.75470.7526Adjusted R20.71980.73880.7421Note: The values of relevant test statistics are shown in parentheses below the estimated coefficients.Suppose that at a 10% significance level, you do not reject the null hypothesis, H0: ?1 = 0, when testing the individual significance of Time in Model B. Would you delete Time from Model B? A. No, removing Time from Model B results in Model C which has a with lower R2. B. No, Model B has the highest R2, so it should be used for making predictions. C. Yes, Time should be deleted because we could not prove its significance even for ? = 0.10. D. Yes, removing Time from Model B results in Model C which has a higher adjusted R2.