Question 1

Based on the following data:

N= 12

X=687

Y=741

XY= 6177

X2=5041

Y2=7569

1. Compute for Bo and B1
2. Determine the correlation coefficient and coefficient determination
3. Interpret the answer of B

Question 2.

The following date represents total expenditure (Y) and its four components as a percentage of gross domestic product for 11 years based on this the following multi linear regression model was fit

Y = 12.7302+1.9384X1 +1.6239X2 -2.3213X3 +0.1469X4

Standard Errors (6.0635) (1.1680) (1.7295) (2.4648) (0.8841)

R2 0.8551

N=11

Total Expenditure (Y)=144.9

Interest payment(X1) =24.1

Subsidies(X2) =12.8

Security Expenditure (X3) =31.8

Grants (X4) = 54.7

1. Estimate the total expenditure for

X1=2.5; x2=1.5; X3=3; and X4=5

b. Test the null hypothesis that interest payments have no influence on Total expenditure at 5% level of significance .

c. Test the alternative hypothesis that security expenditure has positive influence on Total expenditure at 10%level of significance.

d. Test the significance of the regression coefficient B4 at 5%level

e. The significance of the overall model at 5%level of significance