1. Based on the two regression results for the Southwest Airlines (LUV), should you include US Gas Prices as one of the variables for your model and why?

1. 
   
2. 

Transcribed Image Text:

Regression Statistics Multiple R 0.475588 R Square 0.226184 Adjusted R Square 0.202002 Standard Error 0.074983 Observations 34 ANOVA df SS MS Regression 1 0.052590 0.052590 9.353511 Residual 32 0.179919 0.005622 Total 33 0.232509 Intercept S&P 500 Coefficients 0.030940 Standard Error 0.013454 t Stat 2.299711 P-value 0.028138 1.299582 0.424929 3.058351 0.004473 R(LUV) = Intercept + B₁ * R(S&P 500) + ei Regression Statistics Multiple R 0.481580 R Square 0.231920 Adjusted R Square 0.182366 Standard Error 0.075900 Observations ANOVA 34 dt SS MS F Regression Residual Total 2 0.0539234 31 0.1785856 33 0.2325090 0.0269617 4.6801817 0.0057608 Intercept S&P 500 US Gas Price Coefficients -0.003963 Standard Error 0.073811 t Stat -0.053686 P-value 0.957530 1.254744 0.440105 2.851012 0.007685 0.032202 0.066930 0.481130 0.633803 R(LUV) = Intercept + B₁* R(S&P 500) + B2* US Gas Prices + ei Regression Statistics Multiple R 0.475588 R Square 0.226184 Adjusted R Square 0.202002 Standard Error 0.074983 Observations 34 ANOVA df SS MS Regression 1 0.052590 0.052590 9.353511 Residual 32 0.179919 0.005622 Total 33 0.232509 Intercept S&P 500 Coefficients 0.030940 Standard Error 0.013454 t Stat 2.299711 P-value 0.028138 1.299582 0.424929 3.058351 0.004473 R(LUV) = Intercept + B₁ * R(S&P 500) + ei Regression Statistics Multiple R 0.481580 R Square 0.231920 Adjusted R Square 0.182366 Standard Error 0.075900 Observations ANOVA 34 dt SS MS F Regression Residual Total 2 0.0539234 31 0.1785856 33 0.2325090 0.0269617 4.6801817 0.0057608 Intercept S&P 500 US Gas Price Coefficients -0.003963 Standard Error 0.073811 t Stat -0.053686 P-value 0.957530 1.254744 0.440105 2.851012 0.007685 0.032202 0.066930 0.481130 0.633803 R(LUV) = Intercept + B₁* R(S&P 500) + B2* US Gas Prices + ei

Answer rating: 100% (QA)

Based on the two regression results for Southwest Airlines LUV it appears that including US Gas Pric... View the full answer