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Barron s conducts an annual review of online brokers including both

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.

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