Final Review Part 1 Name _________________________
1. Bankrate.com reports mortgage loan interest rates for 30-year and 15-year fixed-rate mortgage loans for 9 randomly selected lending institutions. Assuming normality, a financial analyst would like to determine whether there is a difference between mean 30-year rates and mean 15-year rates.
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Lending Institutions
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1
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2
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3
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4
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5
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6
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7
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8
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9
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30 year
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6.72
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6.75
|
6.74
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6.60
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6.43
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6.88
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6.90
|
6.68
|
|
6.80
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15 year
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6.60
6.37
|
6.55
|
6.36
|
6.16
|
6.58
|
6.80
6.39
|
6.54
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Ho: There is no difference
n = df = alpha = 5%
Ha: There is a difference
mean of differences =
standard deviation of differences =
Decision and interpret results:
2. A large discount chain compares the performance of its credit managers in Ohio and Illinois by comparing the mean dollar amounts owed by customers with delinquent charge accounts in these two states. Ten delinquent accounts were randomly selected from Ohio and 10 delinquent accounts were randomly selected from Illinois. We are testing at 95% confidence whether there is a difference between the population mean dollar amounts owed by customers with delinquent charge accounts in Ohio and Illinois.
Ohio: n = 10 xbar = $524 s = $68
Illinois: n = 10 xbar = $473 s = $22
Ho: There is no difference
Ha: There is a difference
Decision and interpret results:
3. A telephone company wants to determine whether the appeal of a new security system is higher with homeowners compared to renters. Independent samples of 140 homeowners and 60 renters are randomly selected. Each respondent views a TV pilot in which a test ad for the new security system is embedded twice. Afterward, each respondent is interviewed to find out whether he or she would purchase the security system. Results show that 25 out of the 140 homeowners definitely would buy the security system, while 9 out of the 60 renters definitely would buy the system. Test for a higher proportion of homeowner purchases at 95%.
Ho: There is no difference or homeowner proportion is smaller
Ha: Homeowner proportion is greater
Sample proportion for homeowners:
Sample proportion for renters:
Grand proportion:
Decision and interpret results:
BUS21
0
y
>
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1.
|
The plant manager wants to establish the relationship between the number of line shutdowns (
x
) and the number of delivery deadlines missed (y). Below is the data collected from the last six months:
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SST
|
|
|
|
|
|
|
|
|
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SSE
|
SSR
|
|
x
|
y
|
|
|
3
|
83
|
-2
|
18
|
-36
|
|
|
4
|
324
|
80.08
|
8.
5
3
|
|
227.41
|
4
74
|
-1
|
|
|
9
|
-9
|
|
|
1
|
81
|
7
2.
54
|
2.13
|
|
56.85
|
|
7
|
48
|
|
2
|
-17
|
-34
|
4
28
9
|
49.92
|
3.69
|
227.41
2
84
|
-3
|
19
|
-57
|
9
361
|
87.62
|
13.10
|
|
511.66
|
|
6
|
59
|
1
|
-6
|
-6
1
36
|
57.46
|
2.37
|
56.85
|
8
|
42
|
3
-23
|
-69
|
9
529
|
42.38
|
0.14
|
511.66
|
totals
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30
|
390
|
|
0
|
0
-211
|
28
|
1620
|
29.96
|
1591.84
|
|
means
|
5
|
65
|
|
b1 =
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Coefficient of Determination =
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bo =
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Regression equation is
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2.
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In multiple regression, the following regression equation is obtained:
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y = -8 + 2.6x – 47.2w
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Predict y if x = 30 and w = -10
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3. As a car salesperson, you must predict the selling price of your used cars. You calculate a regression line with the dependent variable being the price and the independent variable being the mileage of the vehicle. You use a statistical software package that reports that your SSE is 22 and your SST is 40.
What is your coefficient of determination?
What could you do to improve your regression equation?
