1. The following equation was obtained by Ordinary Least Squares (OLS): rdintens=3.3+ 0.0030sales -0.000078sales (0.12) (0.0019) (0.000048) -63, R² -0.1534, (standard errors are in parenthesis) here rdintens is R&D expenditure of a company as a percent of fales and saler is the sales of products ieasured in millions of pounds. Which of the following is TRUE? sales should not be included given 5% significance level. If sales increases by a million, the ratio of R&D expenditure to sales will increase by 0.003% If sales increases by a million, the ratio of R&D expenditure to sales will increase by 0.3% If the variable of sales is measured in billions, it will change the estimated standard errors but not the parameters Page 2 of 30 Next Page

MATLAB: An Introduction with Applications
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ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
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1. The following equation was obtained by Ordinary Least Squares (OLS):
rdintens 3.3+ 0.0030sales -0.000078sales²
(0.12) (0.0019)
(0.000048)
n=63, R² -0.1534, (standard errors are in parenthesis)
where rdintens is R&D expenditure of a company as a percent of fales and saler is the sales of products
measured in millions of pounds. Which of the following is TRUE?
sales should not be included given 5% significance level.
If sales increases by a million, the ratio of R&D expenditure to sales will increase by 0.003%
If sales increases by a million, the ratio of R&D expenditure to sales will increase by 0.3%.
If the variable of sales is measured in billions, it will change the estimated standard errors but not the
parameters.
Page 2 of 30
Next Page
Transcribed Image Text:1. The following equation was obtained by Ordinary Least Squares (OLS): rdintens 3.3+ 0.0030sales -0.000078sales² (0.12) (0.0019) (0.000048) n=63, R² -0.1534, (standard errors are in parenthesis) where rdintens is R&D expenditure of a company as a percent of fales and saler is the sales of products measured in millions of pounds. Which of the following is TRUE? sales should not be included given 5% significance level. If sales increases by a million, the ratio of R&D expenditure to sales will increase by 0.003% If sales increases by a million, the ratio of R&D expenditure to sales will increase by 0.3%. If the variable of sales is measured in billions, it will change the estimated standard errors but not the parameters. Page 2 of 30 Next Page
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