1. Evaluate the following statements: a. A high means a significant regression. b. A very large…

1. Evaluate the following statements:

a. A high means a significant regression.

b. A very large sample size in a regression problem will
always produce useful results.

2. Ed Bogdanski, owner of the American Precast Company, has
hired you as a parttime analyst. Ed was extremely pleased when you determined
that there is a positive relationship between the number of building permits
issued and the amount of work available to his company. Now he wonders if it is
possible to use knowledge of interest rates on first mortgages to predict the
number of building permits that will be issued each

1. Evaluate the following statements:

a. A high means a significant regression.

b. A very large sample size in a regression problem will
always produce useful results.

2. Ed Bogdanski, owner of the American Precast Company, has
hired you as a parttime analyst. Ed was extremely pleased when you determined
that there is a positive relationship between the number of building permits
issued and the amount of work available to his company. Now he wonders if it is
possible to use knowledge of interest rates on first mortgages to predict the
number of building permits that will be issued each month. You collect a random
sample of nine months of data, as shown in Table P-11

a. Plot the data as a scatter diagram.

b. Determine the fitted regression function.

c. Test for the significance of the slope coefficient at the
.05 significance level.

d. When the interest rate increases by 1%, what is the
average decrease in the number of building permits issued?

e. Compute the coefficient of determination.

f. Write a sentence that Ed can understand, interpreting the
number computed in part e.

g. Write Ed a memo explaining the results of your analysis.

Table p-11