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Midterm

QM 222 MidtermExam


Department
Marketing
Course Code
SMG QM 222
Professor
All
Study Guide
Midterm

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SM222 SECTION B6: Modeling Business Decisions Midterm
BOSTON UNIVERSITY
School of Management
Fall 2014
Sign the following statement. Grades will not be given to students who do not do so.
I have not cheated or helped anyone else cheat on this exam.
________________________________
Signature
Name:_______________________________
DO NOT WRITE YOUR NAME ANYWHERE ELSE ON THIS TEST.
NOTE: WE GIVE LOTS OF PARTIAL CREDIT ON TESTS. Always say something.
When we ask for calculations, show all calculations, even those you could do just on the calculator.
Questions asking for explanations and calculations are graded as incorrect if no adequate
explanation is given.
Read every question carefully.

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SECTION 1 Your Regression
Answer the following questions regarding the regressions that you have brought with you or the regressions
that Professor Kahn gives to you.
Be sure to put your name on the page with your regression. When you complete the test, staple your
regression sheet to your test.
Make sure all variables are defined (including your Y variable)
Answer these questions based on your simple (1 variable) regression:
1. What does each observation in your data set represent? (in a few words at most)
2. Use the value of the coefficient on your variable in a sentence that explains what it tells us. In other
words, interpret this coefficient. (Do not use statistics terms in your answer. Be specific but concise.)
Note: If your “simple” regression includes two (or more) X-variables that are different categories of the
same categorical variable, answer this question and the next only about the first of these variables.
3. Does this variable have a statistically significant effect on your dependent variable? Circle one:
YES NO
List three ways that you know based on the regression output:
i.
ii.
iii.
When a variable does not have a statistically significant effect, what does that mean, in everyday non-
statistics terms?

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Now answer these questions based on your multiple regression:
4. Use the value of the coefficient on your key variable in the multiple regression (i.e. the key variable that
was also in the simple regression) in a sentence that explains what it tells us. In other words, interpret
this coefficient. (Do not use statistics terms in your answer. Be specific but concise.)
5. Compare the two coefficients on the key variable that enters both regressions. Explain as specifically as
possible why in the multiple regression, the coefficient it fell, rose, or stayed the same. This question will
be graded based on whether it identified precisely why we see this direction of change.
6. For two other variables in your multiple regression, explain specifically what we learn from the
coefficient. (If you have multiple dummy variables for a categorical variable, this counts here as one
variable. If you have two variables in total in your multiple regression, you obviously can only explain 1.)
7. Why is it important to include all of these other variables in your regression, if they are not the focus of
your research question? Explain fully.
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