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SCENARIO 18-9
What are the factors that determine the acceleration time (in sec. )from 0 to 60 miles per hour of a car? Data on the following variables for 171 different vehicle models were collected:
Accel Time: Acceleration time in sec.
Cargo Vol: Cargo volume in cu.ft.
HP: Horsepower MPG: Miles per gallon
SUV: 1 if the vehicle model is an SUV with Coupe as the base when SUV and Sedan are both 0 Sedan: 1 if the vehicle model is a sedan with Coupe as the base when SUV and Sedan are both 0
The regression results using acceleration time as the dependent variable and the remaining variables as the independent variables are presented below.
The various residual plots are as shown below.
The coefficient of partial determination ( R2 yj.(All variables except j ) )of each of the 5 predictors are, respectively,0.0380,0.4376,0.0248,0.0188,and 0.0312.
The coefficient of multiple determination for the regression model using each of the 5 variables X j as the dependent variable and all other X variables as independent variables ( R2 j )are,respectively, 0.7461,0.5676,0.6764,0.8582,0.6632.
-Referring to Scenario 18-9,_____of the variation in Accel Time can be explained by the five independent variables after taking into consideration the number of independent variables and the number of observations.
Present Value
The present-day evaluation of a future financial amount or cash flow streams, using a predetermined rate of return.
Actuarial Information
Data used by actuaries to calculate and assess risks, premiums, liabilities, and retirement benefits, based on statistical and mathematical models.
Bond Issue
A bond issue refers to the process by which a borrower issues bonds to investors in order to raise capital, under specific terms regarding the repayment of the principal and periodic interest payments.
Yield Interest
The interest generated from an investment, usually expressed as an annual percentage of the investment's cost.
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