Using monthly data, an analyst obtained the following regression results in a ma

ID: 3217176 • Letter: U

Question

Using monthly data, an analyst obtained the following regression results in a marketing research study for XYZ inc: S=60.0+4.0 Ad s.e.
(12.0) (8.0)

n=28
R^2=0.35
S= sales, measured in Kg,
Ad=advertising spending, measured in $1000

Figures in parentheses are the standard errors of the estimated regression coef.

A. are the two estimated coef. each individually significant different from zero? Show your work step by step (Sig Level = 10%)

B. Establish a 95% confidence intervals for the true value of the coefficient for advertising spending. Show you work step by step.

critical value for 10% level and (n-2=26 degree of freedom ) =+/-1.7056

here for slope test stat =b1/Std error =4/8 =0.5 ; as test stat is in acceptance region we can not claim that slope is significant.

for intercept test stat t=b0/std error =60/12=5 as test stat is in critical region we can conclude that intercept is significant.

b) for 95% CI, t=2.0555

hence confidence interval for slope =b1-/+ t*std error =-12.4442 ; 20.4442

hence confidence interval for intercept =b0-/+ t*std error =35.3336 ; 84.6664

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