A car manufacturer would like to develop a regression model that would predict t

Question

A car manufacturer would like to develop a regression model that would predict the number of cars sold per month by a dealership employee based on the employee's number of years of sales experience (Exp), the employee's weekly base salary before commissions (Salary), and the education level of the employee. There are three levels of education in the sales

forcelong—high

school degree, associate's degree, and bachelor's degree. The following dummy variables have been defined:

ED1=1

for a Bachelor's degree,

ED1 =0

otherwise;

ED2 =1

for an Associate's degree,

ED2 = 0

otherwise. The given Excel output shows the partially completed regression output from a random sample of employees from the previous month. Which one of the following statements is true concerning the 95% confidence interval for the regression coefficient for the Exp variable?

A.

Because the confidence interval does not include zero, we have evidence to conclude that there is no relationship between the sales experience of the employee and the number of cars sold per month.

B.

Because the confidence interval includes zero, we have evidence to conclude that there is no relationship between the sales experience of the employee and the number of cars sold per month.

C.

Because the confidence interval does not include zero, we have evidence to conclude that there is a relationship between the sales experience of the employee and the number of cars sold per month.

D.

Because the confidence interval includes zero, we have evidence to conclude that there is a relationship between the sales experience of the employee and the number of cars sold per month.

Explanation / Answer

Solution:-

A. Because the confidence interval does not include zero, we have evidence to conclude that there is no relationship between the sales experience of the employee and the number of cars sold per month. False.

B. Because the confidence interval includes zero, we have evidence to conclude that there is no relationship between the sales experience of the employee and the number of cars sold per month. True.

C. Because the confidence interval does not include zero, we have evidence to conclude that there is a relationship between the sales experience of the employee and the number of cars sold per month. True

D. Because the confidence interval includes zero, we have evidence to conclude that there is a relationship between the sales experience of the employee and the number of cars sold per month. False.

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