Instruction 12 $\text { Regressing average grade on university entrance exam score }$

question 200

Multiple Choice

Instruction 12.32
It is believed that average grade (based on a four-point scale) should have a positive linear relationship with university entrance exam scores. Given below is the Microsoft Excel output from regressing average grade on university entrance exam scores using a data set of eight randomly chosen students from a large university.
$\text { Regressing average grade on university entrance exam score }$

$\text { Regression statistics }$
$\begin{array}{|l|l|}\hline\text { MultipleR } & 0.7598 \\\hline \text { R Square } & 0.5774 \\\hline \begin{array}{l}\text { Adjusted R } \\\text { Square }\end{array} & 0.5069 \\\hline \text { Standard Error } & 0.2691 \\\hline \text { Observations } & 8\\\hline\end{array}$

$\text { ANOVA }$
$\begin{array}{|l|l|l|l|l|l|}\hline & d f & 55 & M S & F & \begin{array}{l}\text { Significance } \\F\end{array} \\\hline \text { Regression } & 1 & 0.5940 & 0.5940 & 8.1986 & 0.0286 \\\hline \text { Residual } & 6 & 0.4347 & 0.0724 & & \\\hline \text { Total } & 7 & 1.0287 & & & \\\hline\end{array}$

$\begin{array}{|l|l|l|l|l|l|l|}\hline & \text { Coefficients } & \begin{array}{l}\text { Standard } \\\text { Error }\end{array} & \text { tStat } & \text { p-value } & \text { Lower 95\% } & \text { Upper 95\% } \\\hline \text { Intercept } & 0.5681 & 0.9284 & 0.6119 & 0.5630 & -1.7036 & 2.8398 \\\hline \begin{array}{l}\text { University } \\\text { entrance exam } \\\text { score }\end{array} & 0.1021 & 0.0356 & 2.8633 & 0.0286 & 0.0148 & 0.1895 \\\hline\end{array}$
-Referring to Instruction 12.32,the value of the measured test statistic to test whether there is any linear relationship between average grade and university entrance exam score is

• A) 2.8633.
• B) 0.7598.
• C) 0.0356.
• D) 0.1021.

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Definitions:

Bull Markets

A financial market condition characterized by rising prices and investor optimism.

Information Ratio

A measure of a portfolio manager's performance and ability to generate excess returns relative to a benchmark, considering the volatility of those returns.

Residual Standard Deviation

This is a measure used in statistics to estimate the standard deviation of the residuals (errors) from a regression line, indicating how well the model fits the data.

Beta

A measure of a security's volatility in relation to the overall market; used as a gauge of its risk.