A fitted regression Profit = 262 + 1.51 Sales (all variables in thousands of dol

Question

A fitted regression Profit = 262 + 1.51 Sales (all variables in thousands of dollars) was estimated from a random sample of 15 small coffee kiosks. We can say that: the slope is too small to be significant. the intercept does not seem reasonable. the R2 will be low due to small sample size. predictions are likely to be underestimated.

A. the slope is too small to be significant.

B. the intercept does not seem reasonable.

C. the R2 will be low due to small sample size.

D. predictions are likely to be underestimated.

Explanation / Answer

A fitted regression Profit = 262 + 1.51 Sales (all variables in thousands of dollars) was estimated from a random sample of 15 small coffee kiosks. We can say that: the slope is too small to be significant. the intercept does not seem reasonable. the R2 will be low due to small sample size. predictions are likely to be underestimated.

A. the slope is too small to be significant.

B. the intercept does not seem reasonable.

C. the R2 will be low due to small sample size.

D. predictions are likely to be underestimated.

We can say that the intercept does not seem reasonable, when the sales is zero the predicted profit is 262 which is not reasonable.

For other statements, the given information is insufficient to conclude.

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