Exhibit 17

question 40

Multiple Choice

Exhibit 17.5.An over-the-counter drug manufacturer wants to examine the effectiveness of a new drug in curing an illness most commonly in older patients.Thirteen patients are given the new drug and 13 patients are given the old drug.To avoid bias in the experiment,they are not told which drug is given to them.To check how the effectiveness depends on the age of patients,the following data has been collected. Assuming the variables: Effectiveness = the response variable measured on a scale from 0 to 100,
Age = the age of a patient (in years) ,
Drug = a binary variable with 1 for the new drug,and 0 for the old drug,the regression model,
Effectiveness = β₀ + β₁Age + β₂Drug + β₃Age × Drug,is considered,and the following Excel results are available: Refer to Exhibit 17.5.Which of the following is true?

• A)The predicted effectiveness of the new drug is not higher for any age.
• B)The predicted effectiveness of the new drug is only higher for young patients.
• C)The predicted effectiveness of the new drug is only higher for old patients.
• D)The predicted effectiveness of the new drug is higher for any age.

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Definitions:

Intangibles

Assets that do not have physical form, such as patents, trademarks, and goodwill, but are valuable to a business.

Amortized Cost

The accounting method that gradually reduces the book value of an intangible or tangible asset through periodic charges to income.

IFRS

International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that outline how financial statements should be prepared and disclosed.

Straight-Line Depreciation

A method of calculating the depreciation of an asset which allocates an equal portion of the asset's cost over each year of its useful life.