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A Statistics Professor Gave Three Quizzes Leading Up to the First

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Essay

A statistics professor gave three quizzes leading up to the first test in his class. The quiz grades and test grade for each of eight students are given in the table.

 Student TestGradeQuiz 1  Quiz 2  Quiz 3 175895289107637398749187105649666788767831087871946\begin{array}{ccccc}\text { Student}& \text { TestGrade}& \text {Quiz 1 } & \text { Quiz 2 } & \text { Quiz 3 } \\\hline 1 & 75 & 8 & 9 & 5 \\2 & 89 & 10 & 7 & 6 \\3 & 73 & 9 & 8 & 7 \\4 & 91 & 8 & 7 & 10 \\5 & 64 & 9 & 6 & 6 \\6 & 78 & 8 & 7 & 6 \\7 & 83 & 10 & 8 & 7 \\8 & 71 & 9 & 4 & 6 \\ \hline\end{array}
The professor would like to use the data to find a first-order model that he might use to predict a student's grade on the first test using that student's grades on the first threequizzes.
a. Identify the dependent and independent variables for the model.
b. What is the least squares prediction equation?
c. Find the SSE and the estimator of σ2\sigma ^ { 2 } for the model.


Definitions:

London Interbank Offer Rate

An interest rate average calculated from estimates submitted by leading banks in London that indicates the rate at which banks lend to one another.

Eurodollar Loans

Financial loans that are denominated in U.S. dollars but are held in banks outside the United States.

Overnight

In financial terms, this refers to transactions that are settled or occur from one business day to the next.

Cross-Rate

The exchange rate between two currencies calculated by using a third currency, typically the US dollar, as a reference point.

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