QUESTION 10 Consider the following results of a multiple regression model of dol

Question

QUESTION 10

Consider the following results of a multiple regression model of dollar price of unleaded gas (dependent variable) and a set of independent variables: price of crude oil, value of S&P500, price U.S. Dollars against Euros, personal disposal income (in million of dollars) :

R-Square = 97%

What will be forecasted price of unleaded gas if the value of independent variables are as follows:
Crude Oil = 85; S&P500 = 1725; Price of $ = 0.90 Euros; PDI = 800

$2.71

$3.04

$2.66

$2.99

Coefficient t-statistics Intercept 0.5871 68.90 Crude Oil 0.0651 32.89 S&P 500 -0.0020 18.09 Price of $ -0.0415 14.20 PDI 0.0001 17.32

Explanation / Answer

unleaded gas= 0.5871+(85*0,0651)+(1725*-0.002)+(0.9*-0.0415)+(800*0.0001)
=$2.71

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