Here is the regression of Exercise 7 with the constructed variables:

a) Write out the regression model.

b) In this regression, the variable Budgt*Cmdy is an interaction term. How would you interpret the coefficient of Budgt*Cmdy?

c) What null hypothesis can we test with the t-ratio for Budgt*Cmdy?

d) Would you reject that hypothesis at 0.05?
SECTION 19.3

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Dependent variable is: USGross ($M) R-squared 41.0% R-squared (adjusted) = 37.4% s = 58.45 with 53 - 4 = 49 degrees of freedom Variable Intercept Budget ($M) Budgt*Cmdy Comedy Coefficient SE (Coeff) t-ratio P-value -13.2860 29.20 -0.455 0.6512 1.58935 0.3457 4.60 0.0001 -0.652661 34.4795 0.4863 -1.34 0.1857 33.85 1.02 0.3134