Novine knows that over the last 10 years average computer prices have fallen. She believes that average computer prices can be predicted by time, computing speed (number of instructions processed per second), memory (RAM), storage (hard drive space), and processor chip price.

a. using Excel, develop a linear regression model for the average computer price using the variable above.

b. Calculate the MAD for your model.

c. Calculate R, F, and t statistics and interpret them.

d. What is the best regression model to use to predict average computer price? Is there a problem with using linear regression on this data?

e. Run tests for multicollinearity, autocorrelation, and heteroscedasticity. Comment on the outcomes.

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