You are asked to construct a model to predict the Profit of Branch of a Bank. In

Question

You are asked to construct a model to predict the Profit of Branch of a Bank. In which of the following models all independent variables are significant at =0.05?

A.

Branch Profit = -279355 + 99.031*Total Sales/Year + 24.027*Tatal Sqft + 700.26*FTE Managers

B. Branch Profit = -278183 + 99.047*Total Sales/Year + 24.128*Total Sqft

C.

Total Sqft = -279355 + 99.031*Total Sales/Year + 0.3442 Branch Profit

D.

Total Sqft = Branch Profit + Total Sales/Year + FTE Managers

Total Sales p/year- Total SQUFT- FTE Managers- Branch Profits

10591    2474      2             821298

9069      4262      3             718488

7511      7608      3             630752

1541      3248      2             -40582

7569      5095      2             606998

6014      6455      2             474231

10506    3628      3             861916

4588      2818      1.5         246162

6058      2481      2             386684

3073      7027      3             187208

12021    4052      2.5         1031091

7541      1697      2             504632

3090      3023      2.5         100223

7594      3483      3             561795

10587    5646      2.5         901631

1529      5813      3             29199

6053      1821      2             346304

7578      2872      2.5         532738

A.

Branch Profit = -279355 + 99.031*Total Sales/Year + 24.027*Tatal Sqft + 700.26*FTE Managers

B. Branch Profit = -278183 + 99.047*Total Sales/Year + 24.128*Total Sqft

C.

Total Sqft = -279355 + 99.031*Total Sales/Year + 0.3442 Branch Profit

D.

Total Sqft = Branch Profit + Total Sales/Year + FTE Managers

Explanation / Answer

For regression equation A, the parameter estimates table is:

So we can see that FTE managers is insignificant variable.

For regression equation B, the parameter estimates table is:

Parameter estimates:

So this is the equation in which all the variables are significant.

Option B is correct.

Parameter Estimate Std. Err. Alternative DF T-Stat P-value Intercept -279354.87 15620.283 0 14 -17.884111 <0.0001 Total sales/ year 99.031027 0.96147605 0 14 102.99895 <0.0001 Total SQFT 24.027674 1.9409393 0 14 12.379405 <0.0001 FTE Managers 700.25959 7062.8423 0 14 0.099146995 0.9224

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