# Question

Barron's conducts an annual review of online brokers, including both brokers who can be accessed via a Web browser, as well as direct-access brokers who connect customers directly with the broker's network server. Each broker's offerings and performance are evaluated in six areas, using a point value of 0-5 in each category. The results are weighted to obtain an overall score, and a final star rating, ranging from zero to five stars, is assigned to each broker. Trade execution, ease of use, and range of offerings are three of the areas evaluated. A point value of 5 in the trade execution area means the order entry and execution process flowed easily from one step to the next. A value of 5 in the ease of use area means that the site was easy to use and can be tailored to show what the user wants to see. A value of 5 in the range offerings area means that all the investment transactions can be executed online. The following data show the point values for trade execution, ease of use, range of offerings, and the star rating for a sample of 10 of the online brokers that Barron's evaluated (Barron's, March 10, 2003).

a. Determine the estimated regression equation that can be used to predict the star rating given the point values for execution, ease of use, and range of offerings.

b. Use the F test to determine the overall significance of the relationship. What is the conclusion at the .05 level of significance?

c. Use the t test to determine the significance of each independent variable. What is your conclusion at the .05 level of significance?

d. Remove any independent variable that is not significant from the estimated regression equation. What is your recommended estimated regression equation? Compare the R2 with the value of R2 from part (a). Discuss the differences.

a. Determine the estimated regression equation that can be used to predict the star rating given the point values for execution, ease of use, and range of offerings.

b. Use the F test to determine the overall significance of the relationship. What is the conclusion at the .05 level of significance?

c. Use the t test to determine the significance of each independent variable. What is your conclusion at the .05 level of significance?

d. Remove any independent variable that is not significant from the estimated regression equation. What is your recommended estimated regression equation? Compare the R2 with the value of R2 from part (a). Discuss the differences.

## Answer to relevant Questions

Refer to the data in exercise 2. The estimated regression equation for those data is y-bar = – 1 8.4 + 2.01x1 + 4.74x2 a. Develop a 95% confidence interval for the mean value of y when x1 = 45 and x2 = 15. b. Develop a ...Exercise 5 gave the following data on weekly gross revenue, television advertising, and newspaper advertising for Showtime Movie Theaters. a. Find an estimated regression equation relating weekly gross revenue to television ...Consumer Reports conducted a taste test on 19 brands of boxed chocolates. The following data show the price per serving, based on the FDA serving size of 1.4 ounces, and the quality rating for the 19 chocolates tested ...Refer to exercise 12. In exercise 12 The Ladies Professional Golfers Association (LPGA) maintains statistics on performance and earnings for members of the LPGA Tour. Year-end performance statistics for the 30 players who ...The Jacobs Chemical Company wants to estimate the mean time (minutes) required to mix a batch of material on machines produced by three different manufacturers. To limit the cost of testing, four batches of material were ...Post your question

0