Instruction 12 $\text { Regression statistics }$ $\text { ANOVA }$

question 25

Multiple Choice

Instruction 12.23
The managing partner of an advertising agency believes that his company's sales are related to the industry sales. He uses Microsoft Excel's Data Analysis tool to analyse the last four years of quarterly data with the following results:
$\text { Regression statistics }$
$\begin{array}{|l|l|}\hline \text { Multiple R } & 0.802 \\\hline \text { R Square } & 0.643 \\\hline \begin{array}{l}\text { Adjusted R } \\\text { Square }\end{array} & 0.618 \\\hline \begin{array}{l}\text { Standard Error } \\\text { SYX }\end{array} & 0.9224 \\\hline \text { Observations } & 16 \\\hline\end{array}$

$\text { ANOVA }$
$\begin{array}{|l|l|l|l|l|l|}\hline & \text { df } & \text { SS } & \text { MS } & \text { F } & \text { Sig.F } \\\hline \text { Regression } & 1 & 21.497 & 21.497 & 25.27 & 0.000 \\\hline \text { Error } & 14 & 11.912 & 0.851 & & \\\hline \text { Total } & 15 & 33.409 & & & \\\hline\end{array}$

$\begin{array}{|l|l|l|l|l|}\hline\text { Predictor } & \text { Coef } & \text { StdError } & \text { t Stat } & \text { p-value } \\\hline \text { Intercept } & 3.962 & 1.440 & 2.75 & 0.016 \\\hline \text { Industry } & 0.040451 & 0.008048 & 5.03 & 0.000\\\hline\end{array}$


$\begin{array}{|l|l|}\hline\text { Durbin-Watson } & 1.59 \\\text { Statistic } &\\\hline\end{array}$

-Referring to Instruction 12.23,the partner wants to test for autocorrelation using the Durbin-Watson statistic.Using a level of significance of 0.05,the decision he should make is

• A) the test is unable to make a definite conclusion.
• B) there is evidence of autocorrelation.
• C) there is no evidence of autocorrelation.
• D) there is not enough information to perform the test.

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