Question

In: Statistics and Probability

Account Balance Income Years of Education Size of Household 8976 63 12 2 8308 37 14...

Account Balance Income Years of Education Size of Household
8976 63 12 2
8308 37 14 2
10028 52 16 2
11256 64 15 4
9869 47 17 2
10194 74 15 2
8706 49 12 2
9557 58 14 2
10565 70 16 3
9434 69 11 3
9687 25 18 3
9490 57 15 1
8806 46 14 3
9561 48 16 2
11757 80 15 3
9406 66 14 2
11150 46 15 3
7671 28 12 2
8803 53 13 1
9571 52 15 2
9566 77 12 3
7885 32 14 3
9773 55 11 1
9121 52 15 2
9298 43 14 3
10285 65 15 2
7801 38 12 1
9323 52 14 2
8643 36 16 3
12466 85 15 2
9447 64 14 2
10727 86 15 2
9243 57 15 3
9311 68 12 2
11033 74 14 3
11721 82 16 2
8727 24 15 3
8438 37 15 3
8317 55 12 2
8617 50 14 1
9052 39 16 3
10889 73 15 3
7766 26 14 1
9189 47 15 2
  1. Use data in BUSI1013 Credit Card Balance.xlsx to complete the following. You will need to use a statistical package such as StatTools or the Regression program within Excel’s Data Analysis Add-in to generate the estimated regression equation and the ANOVA etc. (12 points)
    1. What is the estimated regression equation using Account Balance as the dependent variable, and Income, Years of Education, as well as Size of Household as the independent variable?
    2. Comment on the goodness of fit of the model using the coefficient of determination.
    3. Conduct an F test with the critical value approach to see whether the overall model is significant. Use α = 0.01.
    4. Perform a t test with p-value approach for the significance of the Income variable. Use α = 0.05.
    5. Perform a t test with the p-value approach for the significance of the Size of Household variable. Use α = 0.05.
    6. Estimate the Account Balance of a customer who has an income of $62 thousand, 14 years of education, and a household size of 3.

Solutions

Expert Solution

a:

Following is the output of regression anaysis generated by excel:

The multiple regression equation is

(b)

The coefficient of determination is

It shows that 77.2% of variation in accoutn balance is explained by model that is by the independent variables Income, Years of Education, Size of Household.

(c)

The F test statistics is

F = 45.10

The critical value of F using excel function "=FINV(0.01,3,40)" is

Since so we can conclude that model is significant.

(d)

The test statistics for income variable is

t = 10.186

The p-value is

p-value = 0.0000

Since p-value is less than α = 0.05 so income variable is significant to the model.

(e)

The test statistics for Size of Household variable is

t = 1.707

The p-value is

p-value = 0.0956

Since p-value is greater than α = 0.05 so Size of Household variable is not significant to the model.

(f)

The estimated account balance is


Related Solutions

Account Balance Income Years of Education Size of Household 8976 63 12 2 8308 37 14...
Account Balance Income Years of Education Size of Household 8976 63 12 2 8308 37 14 2 10028 52 16 2 11256 64 15 4 9869 47 17 2 10194 74 15 2 8706 49 12 2 9557 58 14 2 10565 70 16 3 9434 69 11 3 9687 25 18 3 9490 57 15 1 8806 46 14 3 9561 48 16 2 11757 80 15 3 9406 66 14 2 11150 46 15 3 7671 28 12...
What is the estimated regression equation using Account Balance as the dependent variable, and Income, Years of Education, as well as Size of Household as the independent variable?
  Regression Statistics       Multiple R 0.878541582       R Square 0.771835311       Adjusted R Square 0.75472296       Standard Error 552.6878046       Observations 44                 ANOVA           df SS MS F Regression 3 41332908 13777636 45.10399 Residual 40 12218552 305463.8   Total 43 53551461                 Coefficients Standard Error t Stat P-value Intercept 2095.365223...
(2) Why does a country's current account balance and capital account balance have equal size but...
(2) Why does a country's current account balance and capital account balance have equal size but opposite signs numerically? (3) Defend or refute the following statement: President Trump's tariffs upon Chinese imports and sanctions against Russia, Iran and countries that do business with these two countries are in the best interest of U.S. workers and businesses.
4. common-size _______ computes all account as percent of total asset. a. balance sheet b. income...
4. common-size _______ computes all account as percent of total asset. a. balance sheet b. income statement c. standardized statements d. both A&B 5. Ratios allow for better comparison _____ and ______. a. internally, externally b. through time, between company c. same industry, different industry d. Both a&b 6. whicih of the following is/are the typical categories of finance ratio? a. non liquidity ratio b. finance leverage ratio c. profitbility ratio d. market calue ratio 7. which of the following...
Suppose you have set a specific goal for the balance in your savings account 12 years...
Suppose you have set a specific goal for the balance in your savings account 12 years from today. You have been making year-end deposits of $2,000 per year for the past 8 years, and this annual deposit (if continued for 12 more years) would have been sufficient to reach your goal under the 10 percent average annual interest rate (annual compounding) that you have been receiving. However you believe that the average annual interest rate on your deposits will be...
Bob is 37 years old and is an account manager with a large telecom company. He’s...
Bob is 37 years old and is an account manager with a large telecom company. He’s been dragging his feet with his retirement plan, opting instead for expensive trips to Vegas and Aspen. He’s decided it’s time to get serious about saving for his retirement. He plans to retire at age 67 and travel the world. Because of this plan, he figures he needs approximately $70,000/year in retirement. His grandfather lived until he was 86 and his dad is in...
Account Balance after 3 years
You deposit $1000 into a saving account with 9% interest per annum. Assuming no transactions on the account, determine the account balance after 3 years.
Develop an estimated regression equation with annual income and household size as the independent variables. Discuss...
Develop an estimated regression equation with annual income and household size as the independent variables. Discuss your findings - Income ($1000s) Household Size Amount Charged ($) 54 3 4,016 30 2 3,159 32 4 5,100 50 5 4,742 31 2 1,864 55 2 4,070 37 1 2,731 40 2 3,348 66 4 4,764 51 3 4,110 25 3 4,208 48 4 4,219 27 1 2,477 33 2 2,514 65 3 4,214 63 4 4,965 42 6 4,412 21 2 2,448...
Need to Prepare Balance sheet and Income Statement 12-31-2017 12-31-2018 ACCT ACCOUNT POST CLOSING UNADJUSTED ADJUSTMENTS...
Need to Prepare Balance sheet and Income Statement 12-31-2017 12-31-2018 ACCT ACCOUNT POST CLOSING UNADJUSTED ADJUSTMENTS ADJUSTED INCOME BALANCE NO. TITLE TRIAL BALANCE TRIAL BALANCE TRIAL BALANCE STATEMENT SHEET DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT ASSETS 111000 General checking account 21,38,784.99 21,50,317.00 21,50,317.00 21,50,317.00 112000 Payroll checking account 28,726.39 1,000.00 1,000.00 1,000.00 113000 Money market account 7,75,549.73 7,82,546.49 7,82,546.49 7,82,546.49 114000 Savings account 48,876.82 51,745.56 51,745.56 51,745.56 119000 Petty cash 500.00 500.00 500.00 500.00...
Clark postulates that household size, respondents age and vulnerability index are covariates of monthly income. What...
Clark postulates that household size, respondents age and vulnerability index are covariates of monthly income. What are the various null hypotheses.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT