# Question: Here is the regression for Exercise 3 with an indicator

Here is the regression for Exercise 3 with an indicator variable:

Dependent variable is: US Gross($M)

R-squared = 0.193, Adjusted R-squared: 0.166

s = 37.01 with 62 - 3 = 59 degrees of freedom

a) Write out the regression model.

b) In this regression, the variable R Rating is an indicator variable that is 1 for movies that have an R rating. How would you interpret the coefficient of R Rating?

c) What null hypothesis can we test with the t-ratio for R Rating?

d) Can you reject the null hypothesis of part c? Explain.

Dependent variable is: US Gross($M)

R-squared = 0.193, Adjusted R-squared: 0.166

s = 37.01 with 62 - 3 = 59 degrees of freedom

a) Write out the regression model.

b) In this regression, the variable R Rating is an indicator variable that is 1 for movies that have an R rating. How would you interpret the coefficient of R Rating?

c) What null hypothesis can we test with the t-ratio for R Rating?

d) Can you reject the null hypothesis of part c? Explain.

**View Solution:**## Answer to relevant Questions

For each of the following, show how you would code dummy (indicator) variables to include in a regression model. a) Type of residence (Apartment, Condominium, Townhouse, Single family home) b) Employment status (Full-time, ...For the Gas prices of Exercise 6, find the lag2 version of the prices. For each of the following time series, suggest an appropriate model: a) Weekly stock prices that reveal erratic periods of up and down swings. b) Annual sales that reveal a consistent percentage annual increase. c) ...Suppose an autoregressive model is used to model sales for a company that peaks twice per year (in June and December). a) What lagged variables would you try in a regression to forecast sales? Explain. b) How would you ...Walmart grew rapidly in the years leading up to the financial crisis. Here is the monthly revenue ($ Billion) for Walmart from November 2003 to January 2007. a) What components of a time series do you see in this timeplot? ...Post your question