Golf Handicaps Are Used to Allow Players of Differing Abilities

question 62

Multiple Choice

Golf handicaps are used to allow players of differing abilities to play against one another in a fair match. Recently a sample of golfers was selected in an effort to develop a model for explaining the difference in handicaps. One independent variable of interest is the number of rounds played per year. Another is whether or not the player is using an "original" name brand club or a copy. In recent years, a number of smaller golf club manufacturers have attempted to copy major golf club designs and sell "copies" of original clubs such as the Big Bertha by Calloway. The resulting regression analysis containing both Rounds Played and a Dummy variable for Club Used is shown as follows: Given this information, which of the following statements is not correct?

• A) The overall regression model is insignificant at the alpha = .05 level.
• B) The Club Dummy variable is statistically significant in the model meaning that knowing that a player used an original club or copy is of value in knowing the player's handicap.
• C) The two independent variables do not explain a statistically significant portion of the variation in golf handicap.
• D) All of the above are not correct.

---

Definitions:

Memorandum Entry

This refers to a journal entry made in the financial records to note a significant event or transaction that doesn’t involve a direct exchange of cash or value and hence does not affect the financial statements directly.

Stock Option Plan

A compensation strategy that allows employees to purchase company stock at a predetermined price.

Liability Account

An account used in accounting to keep track of obligations or debts that a company owes to others, representing claims against the company's assets by external parties.

Stock Option Plans

Programs established by companies to give employees the right to purchase a specific number of the company's shares at a fixed price for a certain period of time.