Exam 12: Linear Regression and Correlation

i. If we are studying the relationship between high school performance and college performance, and want to predict college performance, high school performance is the dependent variable. Ii) A financial advisor is interested in predicting bond yield based on bond term, i.e., one year, two years, etc. The dependent variable is bond term. Iii) The variable used to predict the value of another is called the dependent variable.

i. The coefficient of determination can only be positive. ii. If the coefficient of correlation is 0.68, the coefficient of determination is 0.4624. iii. The standard error of estimate measures the accuracy of our prediction.

i. The smaller the sample, the smaller the possible error as measured by the standard error of estimate. F6 Ii) Approximately 68% of the values lie within two standard errors of the regression line. Iii) For a set of observations, there is no difference in the width of a confidence interval and the width of a predictor interval.F6

i. Trying to predict weekly sales with a standard error of estimate of $1,955, we would conclude that 68 percent of the predictions would not be off more than $1,955, 95 percent would not be off by more $3,910, and 99.7 percent would not be off by more than $5,865. Ii) Approximately 95% of the values lie within two standard errors of the regression line Iii) The smaller the sample, the smaller the possible error as measured by the standard error of estimate.

What is the correlation coefficient?

If the correlation coefficient between two variables equals zero, what can be said of the variables X and Y?

In the least squares equation, Y' = 10 + 20X the value of 20 indicates

In the regression equation, Y' = a + bX, what does the letter "b" represent?

Assume the least squares equation is Y' = 10 + 20X. What does the value of 10 in the equation indicate?

We have collected price per share and dividend information from a sample of 30 companies. Determine the 95% confidence interval for Dividends when the stock price is $40 per share: