Researchers interested in determining the relationship between a firms annual sales and its expenditures on research and
Question:
Researchers interested in determining the relationship between a firm’s annual sales and its expenditures on research and development (x1), television advertising
(x2), and all other advertising (x3) run a regression analysis of 23 firms in the same industry. The results are
The quantities in parentheses are the standard errors of the net regression coefficients. The standard error of estimate Sy.123 is 124. The standard deviation of the dependent variable Sy is 325.
(a) Interpret the net regression coefficient b1.
(b) Test, at the 1 % level of significance, whether each of the net regression coefficients is significantly different from zero.
(c) What is the expected effect when highly correlated independent variables are included in a multiple regression equation?
(d) Calculate the coefficient of multiple correlation and the coefficient of multiple determination.
(e) Estimate the average annual sales for a firm that has research and development expenditures of $6 million, television advertising expenditures of $10 million, and all other advertising expenditures of $7 million.
Step by Step Answer:
Statistics For Business And Financial Economics
ISBN: 9781461458975
3rd Edition
Authors: Cheng Few Lee , John C Lee , Alice C Lee