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The researchers proposed that return on assets (ROA)- net income divided by total assets can be used to predict the sustainable development quality score (SDGs
The researchers proposed that return on assets (ROA)- net income divided by total assets can be used to predict the sustainable development quality score (SDGs scores) of a company. Below are the regression outputs obtained by fitting 30 companies' SDGs scores against their reported ROA. Assume that assumptions for simple linear regression is satisfied. Regression Statistics Multiple R 0.687 R square 0.472 Adjusted R Square 0.453 Standard Error 2.933 Observations 30.000 ANOVA df SS MS F Significance F Regression 1 215.114 215.114 25.005 0 Residual 28 240.879 8.603 Total 29 455.993 Coefficients Standard Error t Stat P-value Intercept 35.653 11.406 3.126 0.004 ROA 1.121 0.224 5.001 0.000 Use the solution given above to answer the following questions, either choose the most correct option, or type in the answer to the number of decimal places specified. 1. (3 marks) The absolute value of the test statistic for testing the slope of the regression line for the output given above is: (3dp) with degrees of freedom equal to: (integer) and with a p value for testing the slope of the regression line is less than 0.05. 2. (2 marks) Select the most appropriate conclusion to the question "Is the ROA a useful predictor for SGDs scores using the output given above?". Choose one of the following: A: There is a significant negative linear relationship between SDGs Scores and ROA. B: There is not enough evidence to indicate that ROA is a useful predictor of SDGs Scores. C: There is a significant positive linear relationship between SDGs Scores and ROA. 3. (1 mark) Based on the output given above, the correlation between ROA and SDGs is: (3dp - remember to include a negative sign if appropriate) 4. (2 marks) Use the regression equation based on the output given above to predict a company's SDGs Score when its ROA is 53.875 : (3dp)
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