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More prediction peril. Consider the previous Mindscape but now use the model:
This time, if
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- How profitable are different sectors of the stock market? One way to answer such a question is to examine profit as a percentage of stockholder equity. A random sample of 32 retail stocks was studied for x1, profit as a percentage of stockholder equity. The result was x1 = 13.2. A random sample of 33 utility (gas and electric) stocks was studied for x2, profit as a percentage of stockholder equity. The result was x2 = 10.0. Assume ?1 = 4.2 and ?2 = 2.6. Note: For degrees of freedom d.f. not in the Student's t table, use the closest d.f. that is smaller. In some cases, this choice will increase the P-value by a small amount or increase the length of the confidence interval, thereby making the answer slightly more "conservative." (a) Let ?1 represent the population mean profit as a percentage of stockholder equity for retail stocks, and let ?2 represent the population mean profit as a percentage of stockholder equity for utility stocks. Find a 95% confidence interval for ?1 − ?2.…arrow_forwardBoys and girls In 2002 the journal Science reported thata study of women in Finland indicated that having sonsshortened the lifespans of mothers by about 34 weeks person, but that daughters helped to lengthen the mothers’lives. The data came from church records from the period1640 to 1870.arrow_forwardA researcher wanted to determine if using an octane booster would increase gasoline mileage. A random sample of seven cars was selected; the cars were driven for two weeks without the booster and two weeks with the booster. Use the definitions of X, and X, as given in the table. Consequently, D= X, -X,. 1 Gasoline Mileage Without booster, X, Gasoline Mileage Without booster,X, (mpg) (mpg) 21.2 23.8 25.4 25.6 20.9 22.4 28.3 27.6 22.8 24.5 28.8 27.3 25.2 23.4 State the alternative hypothesis.arrow_forward
- Suppose that a researcher wants to determine the effect of certain soil on the growth of certain plants. To achieve his objective researcher grows 3 plants in each of 4 different types of soils. later, researcher measure the growth of plants in inches after two months. The result of the experiment was expressed in the following table. S₁ S₂ S₂ P12.1 13.6 11.4 S 122 13.4 6.7 8.9 132 13.8 P P 11.2 10.4 13.6 Find the value of F-statistic to test the effect of soil on Plant growth.arrow_forwardThe following equations were estimated using the data in LAWSCH85: Isalary = 9.90 – .0041 rank + .294 GPA (.24) (.0003) (.069) n = 142, R? = .8238 Isalary = 9.86 – .0038 rank + .295 GPA + .00017 age (.083) (.29) (.0004) (.00036) n = 99, R? = .8036 How can it be that the R-squared is smaller when the variable age is added to the equation?arrow_forwardA researcher wants to study the factors affecting a person's decision to buy a car. For his study, he selects a random sample of 100 people from a city and estimates the following regression equation: C = - 7.35 + 0.44/+ 0.36M – 0.27P, where C is a binary dependent variable which denotes the decision to buy the car (C equals 1 if the person decides to buy the car, and 0 otherwise), / denotes the monthly income of the person (I equals 1 if the income exceeds $5,000 and 0 otherwise), M denotes the car's mileage (measured in miles per gallon) and P denotes the price of the car (in thousand dollars). The researcher wants to test the hypothesis that the coefficient on /, B4, and the coefficient on M, B2, are jointly zero, against the hypothesis that at least one of these coefficients is non-zero. The test statistics for testing the null hypotheses B1 =0 and B = 0 are calculated to be 1.55 and 1.25, respectively. Suppose that these test statistics are uncorrelated. The F-statistic associated…arrow_forward
- Pearson’s r(48) = .80, p = .02 can be interpreted as :arrow_forwardman loves, as everyone should, to collect and analyze statistical information. He wishes to find a relationship between how many hours students study and how they do on their statistics tests. He takes a random sample of 16 students at Ideal U., asks how many hours they studied for a university-wide stat test and how they did on the test, enters the data into a computer for analysis and presents the results below. ANALYSIS OF HOURS AND GRADES (n = 16): Descriptive Statistics: HOURS GRADES Mean: 4.2 75.8 Mode: 5.0 79.0 St. Dev: 2.3 10.1 Quartiles: Q0 2.0 34.0 Q1 3.2 53.7 Q2 4.7 78.5 Q3 6.3 86.9 Q4 9.0 97.0 Regression Analysis: Reg. Eq. is: GRADE = 16.9 + 9.025*HOURS Rsquared = .985 std error = 0.027 F = 8.52 p = .018 We know that 25% of all the grades falls into which of these regions? a. 78.5 to 79.0 b. 78.5 to 86.9 c. 75.8 to 86.9 d. 75.8 to 97.0 e. 78.5 to 97.0 f. 75.8 to 79.0arrow_forwardman loves, as everyone should, to collect and analyze statistical information. He wishes to find a relationship between how many hours students study and how they do on their statistics tests. He takes a random sample of 16 students at Ideal U., asks how many hours they studied for a university-wide stat test and how they did on the test, enters the data into a computer for analysis and presents the results below. ANALYSIS OF HOURS AND GRADES (n = 16): Descriptive Statistics: HOURS GRADES Mean: 4.2 75.8 Mode: 5.0 79.0 St. Dev: 2.3 10.1 Quartiles: Q0 2.0 34.0 Q1 3.2 53.7 Q2 4.7 78.5 Q3 6.3 86.9 Q4 9.0 97.0 Regression Analysis: Reg. Eq. is: GRADE = 16.9 + 9.025*HOURS Rsquared = .985 std error = 0.027 F = 8.52 p = .018 What is the median number of hours studied? a. 2.3 b. 4.7 c. 4.5 d. 4.2 e. 5.5 f. 5 g. cannot be determinedarrow_forward
- man loves, as everyone should, to collect and analyze statistical information. He wishes to find a relationship between how many hours students study and how they do on their statistics tests. He takes a random sample of 16 students at Ideal U., asks how many hours they studied for a university-wide stat test and how they did on the test, enters the data into a computer for analysis and presents the results below. ANALYSIS OF HOURS AND GRADES (n = 16): Descriptive Statistics: HOURS GRADES Mean: 4.2 75.8 Mode: 5.0 79.0 St. Dev: 2.3 10.1 Quartiles: Q0 2.0 34.0 Q1 3.2 53.7 Q2 4.7 78.5 Q3 6.3 86.9 Q4 9.0 97.0 Regression Analysis: Reg. Eq. is: GRADE = 16.9 + 9.025*HOURS Rsquared = .985 std error = 0.027 F = 8.52 p = .018 What problem might there be in using the regression model to predict what grade a student might get if they studied 10 hours? a. The predicted grade for 10 hours is more than 100, which is impossible. b. The value of 10…arrow_forwardQ1 The owner of the ABC garment is interested to study the wastage of the factory. Factory is running in two shifts (morning and evening). The value of the monthly wastage of the material shift wise is given in the data file. The manager told to the owner that on average, the value of monthly (both shifts) wastage is Rs. 4500. The owner feels that the wastage is more than the value which is communicated by the manager; therefore, he gives the data of the last few months (given below) to you as statistician and assigns the following three tasks: Morning Shift 4227 4489 4417 4392 3943 3970 4405 4990 4444 4405 4398 4152 Evening Shift 3366 2964 3043 3804 3721 3675 3504 3236 3955 3420 Task # 1: To test the manager’s claim at 0.05 level of significance. Task # 2: To test the equality of mean wastage in two shifts, assume the variances are equal at 0.05 level of significance.…arrow_forwardThese are the same data as in the previous question. Find the value of b2. You should use a computer to find the solution. Y X1 X2 X3 27.6 1 4 4 9.4 3 5 3 15.6 4 7 1 20. 5 5 4 12.3 3 7 3 8.7 5 3 6 7.3 7 5 7 14.9 6 4 8 17.0 5 3 9 -0.8 4 2 0arrow_forward
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