A numerical measure that indicates the strength of relationship between matched observations of two variables is .

A. the median

B. the standard deviation

C. the mean

D. the correlation coefficient

2. If a B-school wants to predict or forecast the graduating GPA of entering freshmen (an unknown variable of interest), it might look at, among other things, their SAT scores (a known variable). Which of the following statements does not represent this situation?

A. GPA is a dependent variable as it might depend on SAT scores

B. GPA is a fixed variable and does not vary among graduating students

C. SAT is an explanatory variable as it might explain the variation in GPA

D. For a student now entering the B-school, SAT score is known but graduating GPA is unknown and must be predicted

In the equation y = 1.57 + 0.0407 x, which represents a straight line, 0.0407 is the .

A. origin

B. y-intercept of the line

C. slope of the line

D. x-intercept of the line

Least squares regression line is one that .

A. passes through 95% the data points

B. results in zero sum of errors squared

C. maximizes the sum of errors squared

D. results in the smallest sum of errors squared

To determine whether the regression line is a good fit for the data, the difference between the actual y value and the predicted y value are examined for each value of x examined. These differences are referred to as the .

A. predictions

B. residuals

C. adjustments

D. variances

Which of the following is not an assumption of the regression model?

A. The model is linear

B. The error terms decrease as x values increase

C. The error terms are normally distributed

D. The error terms are independent

E. The error terms have constant variance