The following is output from regression analysis performed to develop a model fo

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).

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

Solution: B and C

If the P value for the F-test of overall significance test is less than your significance level, you can reject the null-hypothesis and conclude that your model provides a better fit than the intercept-only model.

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