1. Novo Nordisk A/S, a Danish firm, sells insulin and other drugs worldwide. Activella, an estrogen and progestin hormone replacement therapy sold by Novo-Nordisk, is examined using 33 quarters of data
Y = -204+.34X1-.17X2
(17.0) (-1.71)
Where Y is quarterly sales of Activella, X1 is the Novo's advertising of the hormone therapy, and X2 is the advertising of a similar product by Eli Lilly and Company, Novo-Nordisk's chief competitor. The parentheses contain t-values. Addition information is: Durbin-Watson = 1.9 and R2= .89. According to t distribution table , t .05,31=1,6955
Using the data for Novo-Nordisk, which is correct?
A. Both X1 and X2 are statistically significant.
B. Neither X1 nor X2 are statistically significant.
C. X1 is statistically significant but X2 is not statistically significant.
D. X1 is not statistically significant but X2 is statistically significant.
E. The Durbin-Watson statistic shows significant problems with autocorrelation.
2. Which is NOT true about the coefficient of determination?
A. As you add more variables, the R-square generally rises.
B. As you add more variables, the adjusted R-square can fall.
C. If the R-square is above 50%, the regression is considered significant.
D. The R-square gives the per cent of the variation in the dependant variable that is explained by the independent variables.
E. The higher is the R-square, the better is the fit.
3. Table: Sherwin-Williams Company new Data
Observations Sales Promotional Expenditures Selling Price Disposable Income
I y A P M
1 160 100 15 19
2 200 160 14 17.5
3 140 50 16.5 14
4 190 190 14.5 20
5 130 90 17 15.5
6 160 70 16 14.5
7 200 140 15 21.5
8 150 110 18 18
9 210 200 12 18.5
10 190 100 15.5 20
Total 1750 1250 151 179.5
Mean 175 125 15.1 17.95
A. What is the regression equation for paint sales using a multiple linear regression model?
B. If A=180, P=$14, and M= 20, what is an approximate 95 per cent prediction interval for paint sales?
