Using 20 observations, the m ultiple regression model y = 0 + 1 x1 + 2x2

Using 20 observations, the m ultiple regression model y = β 0 + β1 x1 + β2x2 + ε was estimated. Excel produced the follow ing relevant results.

d f SS MS F Significance F Regression 2 2.12E + 12 1.06E + 12 56.5561 3.07E-08 Residual 17 3.19E + 11 1.88E + 10 Total 19 2.44E + 12 Coefficients Standard Error t Sta t p-value Lower 95%

U pper 95%

Intercept − 987557 131583 − 7.5052 0.0000 − 1265173 − 709941 X1 29233 32653 0.8952 0.3832 − 39660 98125 X2 30283 32645 0.9276 0.3666 − 38592 99158

a. At the 5% significance level, are the explanatory variables jo in tly significant?

b. At the 5% significance level, is each explanatory variable individually significant?

c. What is the likely problem w ith this model?