Exam 2

Question 1

What can regression do?

Answer 1

Testing theory and identifying relationships, measuring strength of a relationship, forecasting

Question 2

Ordinary least square

Answer 2

Find the line that best fits the data points. Min the sum of the squared distances from individual observations to this line

Question 3

R2 correlation

Answer 3

Measures variance explained

Question 4

F test correlation

Answer 4

Test the significance of the overall model to see whether it has explanatory power

Question 5

T test correlation

Answer 5

Test specfic betas to see wheater that particular indenpendent variable has a linear relationship with the dependent varable

Question 6

Multicollinearity exists when

Answer 6

Two or more of the independent variables used in regression are correlated

Question 7

Why do we care about multicollinearity?

Answer 7

Reduces MSR and increases MSE so it decreases fcal and a low fcal fails to reject the null

Question 8

Standardized coefficient

Answer 8

The absolute value indicates importance of predictors

Question 9

Dummy variable

Answer 9

A variable that indicates the presence or absence of some characteristics or attributes

Question 10

Time series analysis

Answer 10

Is a set of quantitative methods for determining patterns in time series data

Question 11

Trend

Answer 11

Steady tendency of increase or decrease over time. Systematic

Question 12

Seasonal variation

Answer 12

Regular fluctuations or periodic changes that repeat year after year. Repeats every year. Systematic

Question 13

Cyclical variation

Answer 13

Repetitive fluctuations or swings of varying length and intensity in the long term. Periods longer than one year. Systematic

Question 14

Random or irregular varaition

Answer 14

Unpredictable random variations in the time series that the above three components fail to account for. Short non repeating unsystematic random

Question 15

What does the moving average do

Answer 15

Allows us to eliminate or smooth out the fluctuations in the time series data

Question 16

Seasonal index

Answer 16

Expresses the value of a time series variable for each period as a percentage of the trend value or moving average for that time period

Question 17

Parametric test

Answer 17

Inferences based on assumptions about the nature of the population distribution

Question 18

Nonparamentric tests

Answer 18

Distribution free methods making no assumptions about the population distribution

Question 19

Purpose of the goodness of fit test

Answer 19

Determine how well an observed set of data fits an expected outcome

Question 20

Chi squared

Answer 20

Two categorical variables

Question 21

Correlation

Answer 21

No iv or dv distiction both continuous

Question 22

ANOVA

Answer 22

Iv: categorical
Dv: continuous

Question 23

Regression

Answer 23

Iv: either
Dv: continous