Question 7 (15 points) Business performance can be affected various economic factors. Data on Sears revenue and interest rate (X4) are collected in an effort to study the relationship between company revenue and interest rate. See data file Sears. Estimate a simple linear regression using Sears revenue as the dependent variable and interest rate as the independent variables. 1. Comment how well the model fits the data. Make sure to discuss the criteria used. 2. Interpret the coefficient for X2. 3. Test to determine the validity of the model. Use a=0.05. 1 Date 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 3/31/95 7443.0 6/30/95 8440.0 9/29/95 7975.0 12/29/95 7855.0 3/31/96 6975.0 6/30/96 7566.0 9/30/96 7212.0 12/31/96 9684.0 3/31/97 7263.0 6/30/97 7846.0 9/30/97 7315.0 12/31/97 9759.0 3/31/98 7515.0 6/30/98 8116.0 9/30/98 7642.0 12/31/98 10401.0 3/31/99 8078.0 6/30/99 8780.0 9/30/99 7962.0 12/31/99 11104.0 3/31/00 8195.0 6/30/00 8998.0 9/30/00 8199.0 12/31/00 11636.0 3/31/01 8337.0 6/30/01 8917.0 9/30/01 8019.0 12/31/01 10878.0 3/31/02 7181.0 6/30/02 7183.0 9/30/02 6459.0 12/31/02 8529.0 3/31/03 6181.0 6/30/03 5092.0 9/30/03 6446.0 12/31/03 4627.0 3/31/04 4797.0 6/30/04 4426,0 9/30/04 5950.0 12/31/041 7626.0 3/31/05 13190.0 6/30/05 12200.0 9/30/05 16420.0 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Sears reven Interest rate in % 6.0100 5.7567 5.7167 5.2767 5.3933 5.4800 5.4100 5.4433 5.6900 5.6000 5.7300 5.5533 5.5900 5.5267 5.1967 4.9000 4.9767 5.3833 6.0600 6.0333 6.5733 6.6267 6.5900 5.2567 4.0967 3.3367 2.0567 1.8233 1.8333 1.7600 1.4867 1.2633 1.1667 1.0700 1.1033 1.0533 1.2467 1.7033 2.2500 2.7833 3.2300 3.7367 4.2967 41 42 43 44 O E F $ G H 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 9/30/05 16420.0 12/31/05 12000.0 3/31/06 12780.0 6/30/06 11940.0 9/30/06 16290.0 12/31/06 11750.0 3/31/07 12240.0 6/30/07 11620.0 9/30/07 15070.0 12/31/07 11070.0 3/31/08 11760.0 6/30/08 10660.0 9/30/08 13280.0 12/31/08 10060.0 3/31/09 10550.0 6/30/09 10190.0 9/30/09 13250.0 12/31/09 10050.0 3/31/10 10460.0 6/30/10 9678.0 9/30/10 12480.0 12/31/10 9540.0 3/31/11 10140.0 6/30/11 9405.0 9/30/11 12480.0 12/31/11 9270.0 3/31/12 9467.0 6/30/12 8857.0 9/30/12 12260.0 12/31/12 8452.0 3/31/13 8871.0 6/30/13 8272.0 9/30/13 10590.0 12/31/13 7879.0 3/31/14 8013.0 6/30/14) 7207.0 9/30/14 8099.0 12/31/14 5882.0 3/31/15 6211.0 6/30/15 5750.0 9/30/15 7303.0 12/31/15 5394.0 3/31/16 5029.0 6/30/16 6052.0 78 79 80 81 82 83 BA 85 86 87 4.2967 4.7200 5.1767 5.3933 5.3233 5.3100 5.3167 5.4233 5.0233 3.2300 2.7567 3.0567 2.8167 1.0833 0.6167 0.3000 0.2233 0.2067 0.4233 0.3367 0.2800 0.2833 0.2200 0.2867 0.4233 0.3300 0.3000 0.2667 0.2333 0.2200 0.1967 0.1233 0.1267 0.1233 0.1133 0.1267 0.1333 0.1500 0.1500 0.2400 0.3600 0.5500 0.5600 0.7000 A1 x A B 9/30/16 4301.0 12/31/16 4365.0 3/31/17 3660.0 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 Sheet1 fx Date C + 0.7700 0.9200 1.0800 D E F G H 1 FLE Question 7 (15 points) Business performance can be affected various economic factors. Data on Sears revenue and interest rate (X4) are collected in an effort to study the relationship between company revenue and interest rate. See data file Sears. Estimate a simple linear regression using Sears revenue as the dependent variable and interest rate as the independent variables. 1. Comment how well the model fits the data. Make sure to discuss the criteria used. 2. Interpret the coefficient for X2. 3. Test to determine the validity of the model. Use a=0.05. 1 Date 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 3/31/95 7443.0 6/30/95 8440.0 9/29/95 7975.0 12/29/95 7855.0 3/31/96 6975.0 6/30/96 7566.0 9/30/96 7212.0 12/31/96 9684.0 3/31/97 7263.0 6/30/97 7846.0 9/30/97 7315.0 12/31/97 9759.0 3/31/98 7515.0 6/30/98 8116.0 9/30/98 7642.0 12/31/98 10401.0 3/31/99 8078.0 6/30/99 8780.0 9/30/99 7962.0 12/31/99 11104.0 3/31/00 8195.0 6/30/00 8998.0 9/30/00 8199.0 12/31/00 11636.0 3/31/01 8337.0 6/30/01 8917.0 9/30/01 8019.0 12/31/01 10878.0 3/31/02 7181.0 6/30/02 7183.0 9/30/02 6459.0 12/31/02 8529.0 3/31/03 6181.0 6/30/03 5092.0 9/30/03 6446.0 12/31/03 4627.0 3/31/04 4797.0 6/30/04 4426,0 9/30/04 5950.0 12/31/041 7626.0 3/31/05 13190.0 6/30/05 12200.0 9/30/05 16420.0 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Sears reven Interest rate in % 6.0100 5.7567 5.7167 5.2767 5.3933 5.4800 5.4100 5.4433 5.6900 5.6000 5.7300 5.5533 5.5900 5.5267 5.1967 4.9000 4.9767 5.3833 6.0600 6.0333 6.5733 6.6267 6.5900 5.2567 4.0967 3.3367 2.0567 1.8233 1.8333 1.7600 1.4867 1.2633 1.1667 1.0700 1.1033 1.0533 1.2467 1.7033 2.2500 2.7833 3.2300 3.7367 4.2967 41 42 43 44 O E F $ G H 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 9/30/05 16420.0 12/31/05 12000.0 3/31/06 12780.0 6/30/06 11940.0 9/30/06 16290.0 12/31/06 11750.0 3/31/07 12240.0 6/30/07 11620.0 9/30/07 15070.0 12/31/07 11070.0 3/31/08 11760.0 6/30/08 10660.0 9/30/08 13280.0 12/31/08 10060.0 3/31/09 10550.0 6/30/09 10190.0 9/30/09 13250.0 12/31/09 10050.0 3/31/10 10460.0 6/30/10 9678.0 9/30/10 12480.0 12/31/10 9540.0 3/31/11 10140.0 6/30/11 9405.0 9/30/11 12480.0 12/31/11 9270.0 3/31/12 9467.0 6/30/12 8857.0 9/30/12 12260.0 12/31/12 8452.0 3/31/13 8871.0 6/30/13 8272.0 9/30/13 10590.0 12/31/13 7879.0 3/31/14 8013.0 6/30/14) 7207.0 9/30/14 8099.0 12/31/14 5882.0 3/31/15 6211.0 6/30/15 5750.0 9/30/15 7303.0 12/31/15 5394.0 3/31/16 5029.0 6/30/16 6052.0 78 79 80 81 82 83 BA 85 86 87 4.2967 4.7200 5.1767 5.3933 5.3233 5.3100 5.3167 5.4233 5.0233 3.2300 2.7567 3.0567 2.8167 1.0833 0.6167 0.3000 0.2233 0.2067 0.4233 0.3367 0.2800 0.2833 0.2200 0.2867 0.4233 0.3300 0.3000 0.2667 0.2333 0.2200 0.1967 0.1233 0.1267 0.1233 0.1133 0.1267 0.1333 0.1500 0.1500 0.2400 0.3600 0.5500 0.5600 0.7000 A1 x A B 9/30/16 4301.0 12/31/16 4365.0 3/31/17 3660.0 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 Sheet1 fx Date C + 0.7700 0.9200 1.0800 D E F G H 1 FLE