The following is output from regression analysis performed to develop a model fo
ID: 3157874 • Letter: T
Question
The following is output from regression analysis performed to develop a model for predicting a firm’s Price-Earnings Ratio (PE) based on Growth Rate, Profit Margin, and whether or not the firm is Green (1 = Yes, 0 = No).
The regression equation is
PE= 8.04 + 0.757 Growth Rate + 0.0516 Profit Margin + 2
Predictor Coef SE Coef T P
Constant 8.043 1.570 5.12 0.000
Growth Rate 0.7569 0.1355 5.59 0.000
Profit Margin 0.05162 0.03239 1.59 0.139
Green? 2.0900 0.7945 2.63 0.023
S = 1.12583 R-Sq = 87.8%
Analysis of Variance
Source DF SS MS F P
Regression 3 100.709 33.570 26.48 0.000
Residual Error 11 13.942 1.267
Total 14 114.651
Based on the F-statistic and associated p-value, we can conclude at = .05 that A. the regression equation is not significant. B. all independent variables in the model are significant. C. the regression equation is significant. D. none of the independent variables in the model are significant. E. both B and C.
Explanation / Answer
Based on the F-statistic and associated p-value, we can conclude at = .05 that
B. all independent variables in the model are significant.
and C. the regression equation is significant.
Since, P=0.000 which is less than alpha=0.05
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