Question

The following estimated regression equation relating sales to inventory investment and advertising expenditures was given. ý = 24 + 14x + 7x2 The data used to develop the model came from a survey of 10 stores; for those data, SST = 18,000 and SSR = 12,780. (a) For the estimated regression equation given, compute RS R2 = (b) Compute R, (Round your answer to two decimal places.) (c) Does the model appear to explain a large amount of variability in the data? Explain. (For purposes of this exercise, consider an amount large if it is at least 55%. Round your answer to the nearest integer.) The adjusted coefficient of determination shows that % of the variability has been explained by the two independent variables; thus, we conclude that the model does explain a large amount of variability.

Answer 1

2 12,780 - @ coeffcient of deteeminition = R = SSR > R2= 12.780 18,000. R²=0.71] given, X., X2 are 2 independent variables, (k) so, n = 10, KE2, R=0.71 RG2 = 1 - (1-R2) - ( n-K-1 § 1-(1-071) (10-1) (10-2-1) = 1 -0.37285 Ra=0.63 © The adjusted coefficient of determinition shows that, 631% of the variability has been explained by the the telo pndependent variabler.