BUSI 405 Weekly Exercise 4 solutions complete answers
Chapter 4: Introuduction to Forecasting with Regression Trend Models
1. Homework: Exercises 8, 9, 10, 11, 14 and 18
Exercise 4:
a. t-ratio=coefficient/standard error
The rule of thumb for significance testing is if the absolute value of t-ratio is greater than 2
then, the coefficient is statisically significant which means the coefficient is significantly different from zero.
For example, t-ratio for "Constant" is 3.04 which is greater than 2. Therefore, the coefficient of 20,720 is significantly different from zero.
b. It is R-squared right below the table
c. Substitute 20 into EXP in the following equation
Salary = 20,720 + 805 (EXP) for point estimate the approximate 95 percent confidence interval estimates would be point estimate ± 2 (SEE)
SEE is the standard erro of the estimate which is right under R-squared value
Exercise 10:
a. The equation is
Booking = b0 + b1(Income)
Booking is the dependent variable and Income is the independent variable
To obtian the regression eq;uation using Forecast X:
First, highlight the data for "Bookings" and "Income." Do not highlight "Location"
Open Forecast X > Forecast Method > Choose "Multiple Regression" under "Forecast Technique" > Report > Audit>Finish
Exercise 18:
a. For trend forecat, open Forecast X > Forecast Method > Choose "Trend (Linear) Regression"
b. To reseasonalize the data, time the value with the corresponding seasonal index
For example, for Jan-17, actual shoe store sales SSS=SASSS x 0.74 = 2,2422 x 0.74=1,792
