TABLE 14-10
You Worked as an Intern at We Always

question 85

Multiple Choice

TABLE 14-10
You worked as an intern at We Always Win Car Insurance Company last summer. You notice that individual car insurance
premiums depend very much on the age of the individual, the number of traffic tickets received by the individual, and the
population density of the city in which the individual lives. You performed a regression analysis in EXCEL and obtained the
following information:


Regression Analysis
$\begin{array}{lr}\hline\text {Regression Statistics } \\\hline\text { Multiple R} & 0.63 \\\text {R Square }& 0.40 \\\text {Adjusted R Square} & 0.23 \\\text {Standard Error }& 50.00 \\\text {Observations} & 15.00 \\\hline\end{array}$

ANOVA
$\begin{array}{lccccc}\hline & \text { d f} & \text {SS} & \text {MS} & \text {F } & \text {Significance F } \\\hline \text {Regression} & 3 & & 5994.24 & 2.40 & 0.12 \\\text {Residual }& 11 & 27496.82 & & & \\\text {Total }& 45479.54 & & & \\\hline\end{array}$

$\begin{array}{lccrrrr}\hline & \text {oefficients}&\text { Standard Error }& \text { t Stat} &\text { p-value }& \text {Lower 99.0\% }& \text {Upper 99.0 \% } \\\hline\text { Intercept} & 123.80 & 48.71 & 2.54 & 0.03 & -27.47 & 275.07 \\\text {AGE }& -0.82 & 0.87 & -0.95 & 0.36 & -3.51 & 1.87 \\\text {TICKETS}& 21.25 & 10.66 & 1.99 & 0.07 & -11.86 & 54.37 \\\text {DENSITY} & -3.14 & 6.46 & -0.49 & 0.64 & -23.19 & 16.91 \\\hline\end{array}$

-Referring to Table 14-10, to test the significance of the multiple regression model, what is the form of the null hypothesis?

• A) \( H_{0}: \beta_{1} \)
• B) \( H_{0}: \beta_{1}=\beta_{2}=\beta_{3} \)
• C) \( H_{0}: \beta_{0} \)
• D) \( H_{0}: \beta_{0}=\beta_{1}=\beta_{2}=\beta_{3} \)

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Definitions:

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