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Using 20 hefollowing regression output is obtained from estimating y=0 + |x+Pod+

ID: 2935301 • Letter: U

Question

Using 20 hefollowing regression output is obtained from estimating y=0 + |x+Pod+And+E, 10.08 3.92 -4.72 2.76 0.0056 3.15 0.70 4.00 0.50 3.20 560 0.0000 0.2552 xd 5.52 0.0000 Compute yhat for x-11 and d = 1; then compute yhat for x = 11 and d·0. (Round intermediate calculations to 4 decimal places and final answers to 2 decimal places.) a. 11 and d=1 X=11 and d . 0 b-1. Is the dummy variable d significant at the 5% level? O Yes, since we reject the relevant null hypothesis O Yes, since we do not reject the relevant null hypothesis. O No, since we reject the relevant null hypothesis. O No, since we do not reject the relevant null hypothesis. b-2. Is the interaction variables xd significant at the 5% level? Yes, since we reject the relevant null hypothess O Yes, since we do not reject the relevant null hypothesis O No, since we reject the relevant null hypothesis No, since we do not reject the relevant null hypothesis

Explanation / Answer

a.

The regression equation is,
y-hat = 10.08 + 3.92 x - 4.72 d + 2.76 x*d

For x = 11, d = 1,
y-hat = 10.08 + 3.92*11 - 4.72 * 1 + 2.76 * 11 * 1 = 78.84

For x = 11, d = 0,
y-hat = 10.08 + 3.92*11 - 4.72 * 0 + 2.76 * 11 * 0 = 53.2

b-1.
As, p-value for d is 0.2552, which is greater than the significance level (0.05), we fail to reject the null hypothesis and the variable d is not significant.
So, the correct option is,
No, since we do not reject the relevant null hypothesis.

b-2.
As, p-value for xd is 0.0000, which is less than the significance level (0.05), we reject the null hypothesis and the interaction variable xd is significant.
So, the correct option is,
Yes, since we reject the relevant null hypothesis.

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