A cable company would like to develop the ability to predict the monthly cable b
ID: 3367511 • Letter: A
Question
A cable company would like to develop the ability to predict the monthly cable bill for a customer. A multiple regression model was developed using a random sample of customers using three independent variables. The independent variables are TV (the number of televisions in the household), People (the number of people living in the household), and Years (the number of years that the household has been a customer). Complete parts a through c below. EEBClick the icon to view the regression output a. Calculate the multiple coefficient of determination R2 0.5412 (Round to four decimal places as needed) b. Test the significance of the overall regression model using ?-0 05 State the null and altemative hypotheses. Choose the correct answer below.Explanation / Answer
1)
a) We need to find R Square from the regression output
R Square = 1 - (SSR/SST)
From the ANOVA table, we have SSR =8362.44 and we have SST = 18228.09
R Square = 1-(8362.44/18228.09) = 0.5412
b) We have 3 independent variables- TV, People and Years
Our answer will be Option - (C)
H0: The Null Hypothesis should talk about no relationship between the variables and hence all bi are equal to 0 (b1=b2=b3=0)
H1: However, if at least one of them is not equal to the other, then there is some relationship between them
So, at least one of bi not equal to 0 will help
We have 3 independent variables- TV, People and Years
Test Statistic, F = MSR/MSE
We have the respective df values in the ANOVA table
MSR = SSR/df = 9865.65/3 = 3288.55
MSE = SSE/df = 8362.44/36 = 232.29
F = 3288.55/232.29 = 14.157
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