In a Regression Model Involving 30 Observations, the Following Estimated $= 60 + 2.8 x _ { 1 } + 1.2 x _ { 2 } - x _ { 3 }$

question 68

Multiple Choice

In a regression model involving 30 observations, the following estimated regression model was obtained: $= 60 + 2.8 x _ { 1 } + 1.2 x _ { 2 } - x _ { 3 }$ . For this model, total variation in y = SSY = 800 and SSE = 200. The value of the F-statistic for testing the validity of this model is:

• A) 26.00.
• B) 7.69.
• C) 3.38.
• D) 0.039.

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Definitions:

Loan Term

The duration of time agreed upon by the lender and borrower for the repayment of a loan.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from a central bank's discount window; or alternatively, used in discounted cash flow (DCF) analysis to present value future cash flows.

Present Value

The immediate value of a future amount of money or stream of payments, given a set rate of return.

Annuity

An investment vehicle that disburses a fixed series of payments to an individual, typically serving as an income provision for those who have retired.