Multiple Regression & Prediction

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HW-7

Bus 310-011

Due Date: 11:59 pm Apr 11

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Total points: 8

For this assignment, submit one Excel file. Save the file P02_11.xlsx as HW-7_Bus 310_your last name.

1. Explore the relationship between the selling prices (Y) and the appraised values (X) of the 148 homes in the file P02_11.xlsx by answering the following questions.

a. Create a scatterplot of the selling price (Y) versus the appraised values (X). Based on the visual evidence, would you say that the selling prices and the appraised values are strongly related? Is the relationship a linear one? Superimpose a trend line on the scatterplot.

b. Estimate a simple linear regression equation using the given data and interpret it.

c.

What is the value of Rin this model? Explain Rin words. 

d. Is this model statistically significant? What is the p-value? Use alpha=0.05.

e. Develop a residual plot using excel. Are any assumptions violated? Explain.

f. Draw a normal probability plot of residuals by finding out the Z-score of the residuals. Use Excel. Plot Z-score at the horizontal axis and residuals at the vertical axis. Do the residuals seem normally distributed? Explain.

[Hint: Similar problem with solution is available under Lec-8 folder.]

[1.5+ 1 + 1+ 1.25 + 1.25 + 2 = 8 points]

 

 

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