The American Association of Individual Investors (AAII) On-Line Discount Broker Survey polls members on their experiences with discount brokers. As part of the survey, members were asked to rate the quality of the speed of execution with their broker as well as provide an overall satisfaction rating for electronic trades. Possible responses (scores) were no opinion (), unsatisfied (), somewhat satisfied (), satisfied (), and very satisfied (). For each broker summary scores were computed by calculating a weighted average of the scores provided by each respondent. A portion of the survey results follow (AAII website, February , ). Brokerage Speed Satisfaction Scottrade, Inc. 3.7 4.0 Charles Schwab 3.5 3.9 Fidelity Brokerage Services 3.5 3.5 TD Ameritrade 4.0 3.8 E*Trade Financial 2.4 2.5 Vanguard Brokerage Services 3.7 3.9 USAA Brokerage Services 3.1 3.4 Thinkorswim 3.1 3.1 Wells Fargo Investments 2.5 3.0 Interactive Brokers 3.0 2.6 Zecco.com 3.1 3.3 a. Select a scatter diagram for these data with the speed of execution as the independent variable. b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables? The scatter diagram indicates a linear relationship between speed of execution rating and overall satisfaction rating for electronic trades. c. Develop the least squares estimated regression equation. Enter negative value as negative number. (to decimals) d. Provide an interpretation for the slope of the estimated regression equation. The slope of the estimated regression line is approximately (to decimals). So, a one unit in the speed of execution rating will increase the overall satisfaction rating by approximately points (to decimal). e. Suppose E*Trade Financial developed new software to increase their speed of execution rating. If the new software is able to increase their speed of execution rating from the current value of to the average speed of execution rating for the other brokerage firms that were surveyed, what value would you predict for the overall satisfaction rating? (to decimals)

The American Association of Individual Investors (AAII) On-Line Discount Broker Survey polls members on their experiences with discount brokers. As part of the survey, members were asked to rate the quality of the speed of execution with their broker as well as provide an overall satisfaction rating for electronic trades. Possible responses (scores) were no opinion (), unsatisfied (), somewhat satisfied (), satisfied (), and very satisfied (). For each broker summary scores were computed by calculating a weighted average of the scores provided by each respondent. A portion of the survey results follow (AAII website, February , ). Brokerage Speed Satisfaction Scottrade, Inc. 3.7 4.0 Charles Schwab 3.5 3.9 Fidelity Brokerage Services 3.5 3.5 TD Ameritrade 4.0 3.8 ETrade Financial 2.4 2.5 Vanguard Brokerage Services 3.7 3.9 USAA Brokerage Services 3.1 3.4 Thinkorswim 3.1 3.1 Wells Fargo Investments 2.5 3.0 Interactive Brokers 3.0 2.6 Zecco.com 3.1 3.3 a. Select a scatter diagram for these data with the speed of execution as the independent variable. b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables? The scatter diagram indicates a linear relationship between speed of execution rating and overall satisfaction rating for electronic trades. c. Develop the least squares estimated regression equation. Enter negative value as negative number. (to decimals) d. Provide an interpretation for the slope of the estimated regression equation. The slope of the estimated regression line is approximately (to decimals). So, a one unit in the speed of execution rating will increase the overall satisfaction rating by approximately points (to decimal). e. Suppose ETrade Financial developed new software to increase their speed of execution rating. If the new software is able to increase their speed of execution rating from the current value of to the average speed of execution rating for the other brokerage firms that were surveyed, what value would you predict for the overall satisfaction rating? (to decimals)

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Brokerage	Speed	Satisfaction
Scottrade, Inc.	3.7	4.0
Charles Schwab	3.5	3.9
Fidelity Brokerage Services	3.5	3.5
TD Ameritrade	4.0	3.8
E*Trade Financial	2.4	2.5
Vanguard Brokerage Services	3.7	3.9
USAA Brokerage Services	3.1	3.4
Thinkorswim	3.1	3.1
Wells Fargo Investments	2.5	3.0
Interactive Brokers	3.0	2.6
Zecco.com	3.1	3.3

a. Select a scatter diagram for these data with the speed of execution as the independent variable.

b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables?

The scatter diagram indicates a linear relationship between speed of execution rating and overall satisfaction rating for electronic trades.

c. Develop the least squares estimated regression equation. Enter negative value as negative number.

(to decimals)

d. Provide an interpretation for the slope of the estimated regression equation.

The slope of the estimated regression line is approximately (to decimals). So, a one unit in the speed of execution rating will increase the overall satisfaction rating by approximately points (to decimal).

e. Suppose E*Trade Financial developed new software to increase their speed of execution rating. If the new software is able to increase their speed of execution rating from the current value of to the average speed of execution rating for the other brokerage firms that were surveyed, what value would you predict for the overall satisfaction rating?

(to decimals)

The image contains four scatter plots labeled A, B, C, and D, with each plot representing a different dataset comparing "Speed of Execution" (x-axis) and "Satisfaction" (y-axis). Here’s a detailed description of each plot:

### Plot A:
- **Pattern Observation**: An upward trend is visible. As the speed of execution increases, satisfaction tends to increase slightly.
- **Data Points**: The points are clustered between x-values of approximately 2.5 to 4.0, with y-values spanning from around 2.5 to 4.5.

### Plot B:
- **Pattern Observation**: A random distribution with no clear trend. Satisfaction does not consistently increase or decrease with speed.
- **Data Points**: The points are spread across the graph, with x-values from approximately 2.5 to 4.0 and y-values between 2.5 to 4.5.

### Plot C:
- **Pattern Observation**: A slight upward trend, although less pronounced than in Plot A. As speed of execution increases, satisfaction appears to increase moderately.
- **Data Points**: The points are more concentrated between x-values of around 2.5 to 4.0 and y-values from 2.5 to 4.5.

### Plot D:
- **Pattern Observation**: Similar to Plot B, there is no clear trend, indicating a random distribution of satisfaction regardless of speed.
- **Data Points**: Points are scattered, showing no consistent relationship between the two variables, with x-values ranging from approximately 2.5 to 4.0 and y-values from 2.5 to 4.5.

These graphs are useful for analyzing the relationship between two variables and identifying potential correlations or lack thereof.

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