STAS3001 Test 2 – Chapters 12,13 and 14 – OUT OF 44 POSSIBLE MARKS
Student Name ______
Student Number ______
Solve the following statistical business problems. You must show your work to get full marks. For all problems were an alpha is required use alpha=.01.
Please submit your electronic work through test 2 on the assignment tab in blackboard.
Question 1 (4 marks)
An analyst wishes to know if there is a correlation in share prices for two airlines – Air Canada and West Jet. Determine the correlation coefficient for the data below. Interpret the results of the correlation coefficient.
Air CanadaWest Jet
.7511.92
.7612.09
.8412.25
.8511.85
.8611.78
.8611.74
Question 2 (5 marks)
Calculate the statistical linear regression line for the data below. Interpret the excel output. Use the equation of the line to predict the cost for year 7.
YearCost ($ millions)
156
254
349
446
545
Question 3 (6 marks)
Starbucks has experienced continued rapid growth in recent years. A financial analyst at their corporate head office wanted to determine if they could predict revenue with a predict model using the number of stores, number of drinks offered and average weekly earnings as potential predictors. Using the data below develop a multiple regression model. Interpret the results.
Sales YearRevenueNumber of StoresNumber of DrinksAvg Weekly Earnings
140067615386
2700101515394
31000141218407
41350188622425
51650213527442
62200330027457
72600470930474
Question 4 (8 marks)
A publisher’s information bureau wanted to know if Magazine Advertising Expenditures could be predicted based on household equipment and Supply expenditures. Two models were developed, one using Household Equipment and Supply Expenditures only as a predictor and one using both Household Equipment and Supply Expenditures and (Household Equipment and Supply Expenditures)2. Develop , interpret and compare these models to each other. Which model is better? Do the model results suggest a different model may be required? Why or why not?
Total Magazine Advertising Exp ($millions)Household Equipment and Supply Exp ($millions)
119334
284665
466898
512093
5943102
6644103
Question 5 (7 marks)
A market analyst for a fast food restaurant wanted to determine if the amount spent at restaurant could be predicted based on a customer’s age and gender. Develop the appropriate model using the data below and interpret the results. If a 20 year old male walks into the store what would the model predict the customer will spend?
Spend Amount ($)Age (years)Gender (1=Male,0=Female)
16.80271
13.20160
14.70130
15.40111
11.10170
16.20191
14.90241
13.30210
17.80161
17.10231
14.30180
13.90160
Question 6 (6 marks)
Use the data below to develop a model which predicts y. In your model include not only x1 and x2 but also the square of each x variable and the interaction variable of x1 and x2. Interpret the excel output.
YX1X2
2002103
1747514
198084
190274
184267
188376
1697421
2021114
Question 7 (8 marks)
Use both x1 and the log(x1) to develop a model which predicts log(y). Interpret the results. If x1=500 what does the model predict for the value of y?
YX1
20415850
11631146
17818521
15303304
224871029
21988910
16444242
13245204
17567487
12451192