# Business statistic_when an additional independent variable is added

34.
When an additional independent variable is added to a regression analysis, which of the following could be indications of multicollinear independent variables?

A drop in R-squared and a drop in significance for one or more independent variable.

A drop in adjusted R-squared and an increase in significance for one or more independent variable.

An increase in adjusted R-squared and an increase in significance for one or more independent variable.

An increase in adjusted R-squared and a drop in significance for one or more independent variable

#### How many pages is this assigment?

35.
In a regression analysis, which of the following cannot happen when a new independent variable is added?

R-squared increases and adjusted R-squared increases.

R-squared increases and adjusted R-squared decreases.

R-squared decreases and adjusted R-squared decreases.

Any of the above can occur when a new independent variable is added.

36.
The table below displays data on the composition and performance of the Massachusetts Bubble Growth (MBG) technology stock fund over the last year. The table includes data on the distribution of stocks in the fund by technology sector (information technology (IT) or biotechnology) and by last year’s “performance” (positive or negative net change in share price over the last year).

What is the probability that a randomly-chosen MBG stock is a biotech stock?

30%

23%

7%

None of the above.

37.
The table below displays data on the composition and performance of the Massachusetts Bubble Growth (MBG) technology stock fund over the last year. The table includes data on the distribution of stocks in the fund by technology sector (information technology (IT) or biotechnology) and by last year’s “performance” (positive or negative net change in share price over the last year).

What is the conditional probability that an MBG stock had a positive change in share price, given that it is an IT stock?

24.3%

42.5%

40.0%

None of the above

38.
The table below displays data on the composition and performance of the Massachusetts Bubble Growth (MBG) technology stock fund over the last year. The table includes data on the distribution of stocks in the fund by technology sector (information technology (IT) or biotechnology) and by last year’s “performance” (positive or negative net change in share price over the last year).

Regarding the stocks that made up the MBG fund last year, which of the following statements is true?

Technology sector and performance are statistically independent.

The fact that a given stock’s performance was positive tells us nothing about its sector.

The fact that a given stock is from the biotech sector tells us nothing about its performance.

None of the above.

39.
Jaune Magazine (JM) must decide whether or not to publish a tell-all story about a celebrity. If the story ends up having major impact, JM will realize substantial profits from additional magazine sales, subscriptions, and advertising revenues. However, if JM publishes the story, JM will face a lawsuit; if it loses the suit, the penalties could be substantial. The tree below summarizes JM’s decision.

What is the expected monetary value of publishing the story?

\$10,000

-\$10,000

\$26,000

\$90,000

40.
Jaune Magazine (JM) must decide whether or not to publish a tell-all story about a celebrity. If the story ends up having major impact, JM will realize substantial profits from additional magazine sales, subscriptions, and advertising revenues. However, if JM publishes the story, JM will face a lawsuit; if it loses the suit, the penalties could be substantial. The tree below summarizes JM’s decision.

The EMV of publishing the story is \$10,000. Based on this EMV, JM should publish the story. If the publisher chooses not to publish the story, which of the following best describes the publisher’s attitude towards this decision?

Risk averse.

Risk neutral.

Risk seeking.

Risqué.

41.
Jaune Magazine (JM) must decide whether or not to publish a tell-all story about a celebrity. If the story ends up having major impact, JM will realize substantial profits from additional magazine sales, subscriptions, and advertising revenues. However, if JM publishes the story, JM will face a lawsuit; if it loses the suit, the penalties could be substantial. The tree below summarizes JM’s decision.

The EMV of publishing the story is \$10,000. Based on this EMV, JM should publish the story. For what values of p = Prob[story has major impact] is publishing the story preferable to not publishing the story on the basis of EMV?

p < 10%

p > 10%

p < 90%

None of the above.

42.
Jaune Magazine (JM) must decide whether or not to publish a tell-all story about a celebrity. If the story ends up having major impact, JM will realize substantial profits from additional magazine sales, subscriptions, and advertising revenues. However, if JM publishes the story, JM will face a lawsuit; if it loses the suit, the penalties could be substantial. The tree below summarizes JM’s decision.

If JM publishes the story, the publisher may feel remorse for having violated the celebrity’s privacy. For what values of the cost of remorse would not publishing the story be preferable to publishing the story on the basis of EMV?

Higher than \$10,000

Lower than \$10,000

Lower than \$12,500

None of the above.

43.
The manager of the Regal Beverage Company (RBC) must decide whether or not to market a new soft drink flavor. The new drink’s success depends heavily on consumer reaction to it. An initial decision analysis based on available data reveals that the expected monetary value of marketing the new drink is -\$200,000. The EMV of buying perfect information for this decision is \$50,000, as shown in the tree below. A market research firm offers to do market research for RBC at a cost of \$30,000. Although not perfect, the market research should give RBC some information about potential customer reaction to the new flavor.
Based on an EMV analysis, RBC’s manager should:

Buy the research firm’s sample information.

Not buy the research firm’s sample information, but market the new drink.

Not buy the research firm’s sample information and not market the new drink.

The answer cannot be determined from the information provided.