# Question

This table contains accounting and financial data that describe 324 companies operating in the information sector in 2010. The largest of these provide telephone services. One column gives the expenses on research and development (R&D), and another gives the total assets of the companies. Both columns are reported in millions of dollars. Use the logs of both variables rather than the originals. (That is, set Y to the natural log of R&D expenses, and set X to the natural log of assets. Note that the variables are recorded in millions, so 1,000 = 1 billion.)

(a) What problem with the use of the SRM is evident in the scatterplot of y on x as well as in the plot of the residuals from the fitted equation on x?

(b) If the residuals are nearly normal, of the values that lie outside the 95% prediction intervals, what proportion should be above the fitted equation?

(c) Based on the property of residuals identified in part (b), can you anticipate that these residuals are not nearly normal—without needing the normal quantile plot?

(a) What problem with the use of the SRM is evident in the scatterplot of y on x as well as in the plot of the residuals from the fitted equation on x?

(b) If the residuals are nearly normal, of the values that lie outside the 95% prediction intervals, what proportion should be above the fitted equation?

(c) Based on the property of residuals identified in part (b), can you anticipate that these residuals are not nearly normal—without needing the normal quantile plot?

## Answer to relevant Questions

The cases that make up this dataset are types of cars. The data include the engine size or displacement (in liters) and price of 318 vehicles sold in the United States in 2011. Use price as the response and engine ...For this exercise, you’re a real-estate developer. You’re planning a suburban housing development outside Philadelphia. The design calls for 25 homes that you expect to sell for about $450,000 each. If all goes as ...A marketing research analysis considered how two customer characteristics affect their customers’ stated desire for their product. Potential customers in a focus group were shown prototypes of a new convenience product and ...Refer to the context of the airline in Exercise 31 part (c). Assume that the estimated model meets the conditions for using the MRM for inference. (a) Does the estimated multiple regression equation explain statistically ...The data table gives various characteristics of 318 types of cars sold in the United States during the 2011 model years. Use the combined mileage rating as the response and the horsepower of the engine (HP) and the weight of ...Post your question

0