BUSN 41100 Review Session for Midterm 2024

Review Session for BUSN41100 Midterm Winter 2024 1 True or False For each question, circle either T (true) or F (false). Answering “true” implies that the given statement is always true. Statements are made in the context of this class, and the usual SLR assumptions. 1. T F A confidence interval for β 1 is always centered around b 1 . 2. T F If a regression in one data set yields R 2 = 0 . 75 and a regression in a different data set yields R 2 = 0 . 40 , the regression sum of squares in the second data set is smaller than the regression sum of squares in the first data set. 3. T F A hypothesis test will always fail to reject a null hypothesis when the null hypothesis is true. 4. T F Y must be normally distributed for Y | X to be normally distributed. 5. T F It is possible to reject a null hypothesis when the null hypothesis is true. 6. T F In linear regression, we assume that response values are independent and identically distributed (iid). 7. T F An observation with a studentized residual of 1500 is probably an outlier. 8. T F If you want to decide between β 1 = 0 and β 1 ̸ = 0 , your null hypothesis slope is set to 0. 9. T F Outliers have a higher leverage than the other observations. 10. T F If X i has high leverage, then E [ e 2 i ] is larger than the true residual variance ( σ 2 ). 1