A Company Hires You to Develop a Linear Regression Forecasting

question 21

Multiple Choice

A company hires you to develop a linear regression forecasting model. Based on the company's historical sales information, you determine the intercept value of the model to be 1,200. You also find the slope value is minus 50. If, after developing the model, you are given a value of X = 10, which of the following is the resulting forecast value using this model?

• A) −1,800
• B) 700
• C) 1,230
• D) 1,150
• E) 12,000

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Definitions:

Null Hypothesis

A statement in hypothesis testing that proposes no significant difference or effect, serving as the default assumption to be tested against.

Probability

A measure quantifying the likelihood that certain events will occur.

Null Hypothesis

Re-phrased: The presumption in statistical testing that asserts no association or effect among studied variables.

Critical Value

A threshold in hypothesis testing that defines the boundary beyond which an observed test statistic is considered statistically significant.