Use the Following Information for Problems
to Determine What

question 32

Essay

Use the following information for problems
To determine what affects turnover rate, a sample of 33 companies was randomly selected and data collected on the average annual bonus and turnover rate (%). In addition, a questionnaire was administered to the employees of each company to arrive at a trust index (measured on a scale of 0 - 100). Below are the multiple regression results. Dependent Variable is Turnover Rate
$\begin{array} { l r r r r } \text { Predictor } & \text { Coef } & \text { SE Coef } & \text { T } & \text { P } \\ \text { Constant } & 12.1005 & 0.7826 & 15.46 & 0.000 \\ \text { Trust Index } & - 0.07149 & 0.01966 & - 3.64 & 0.001 \\ \text { Average Bonus } & - 0.0007216 & 0.0001481 & - 4.87 & 0.000 \end{array}$
$$S = 1.49746 \quad \mathrm { R } - \mathrm { Sq } = 79.68 \quad \mathrm { R } - \mathrm { Sq } ( \mathrm { adj } ) = 78.3 \frac { 8 } { 8 }$$
Analysis of Variance
$\begin{array} { l r r r } \text { Source } & \text { DF } & \text { SS } & \text { MS } \\ \text { Regression } & 2 & 262.73 & 131.36 \\ \text { Residual Error } & 30 & 67.27 & 2.24 \\ \text { Total } & 32 & 330.00 & \end{array}$


-Using this model, the turnover rate for a company with a trust index score of 70 and
an average annual bonus of $6500 is predicted to be 2.41%. If the company observes
a turnover rate of 2.15%, what is the value of the residual for this company? What
does the value of the residual tell you about the prediction?

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Definitions:

Appreciation

An increase in the value of an asset over time, which can be influenced by factors like demand, inflation, and currency value changes.

Exchange Rate

An exchange rate is the value of one currency for the purpose of conversion to another currency.

Appreciated

In financial terms, it means an increase in the value of an asset or currency.

Depreciated

A decrease in the value of an asset over time due to wear and tear, age, or obsolescence.