Solution to question ID 22963

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Hi all,
could someone please help me out in understanding the first part of the question ID 22963 in Schweser Pro.

thanks in advance.

regards,
Ravi Verma
 
Why not be a "Sport" and paste the question in the forum so we can all take a look?

Thanks
 
Here it is:

I need to know which equation to use.


In order to improve education in public schools in Massachusetts, the Education Reform Act of 1993 has invested an enormous amount of money into education. In order to assess if additional money really translates into better education, a regression model of Mean score on MCAS is run on per pupil expenditure and median income in the community. A sample of 123 school districts is used to get the following regression estimates.

Variable Coefficient Standard Error t-Statistics
___________________________________________________
Per pupil expenditure 0.0012 0.0010 1.20
Median income 0.0014 0.0001 14.00
Constant 619.1700 508.5500 1.22


Standard error of the estimate: 88.93

Multiple R2 = 0.57

F = 79.53

What is the predicted score of a school district with $6,000 per pupil expenditure and a median income of $70,000?

A) 724.40.

B) 521.55.

C) 632.10.

D) 711.60.



The correct answer was A.

619.17 + 0.0012(6,000) + 0.0014(70000) = 724.4
 
I think you need to read the section on regression analysis again. This is pretty fundamental.
 
could someone elucidate more on this, since the i am not sure how where in the regression analysis we use two variables.
 
This is a multiple regression. The regressed test scores on expenditure per pupil and on median income. There is also an intercept term because you wouldn't expect that with 0 expendture ann no income a student would get a 0 on the test. The question gives you the OLS estimates for the regression parameters and thus the equation. Really, you need to reread this. I promise.
 
Thanks much, now that you have used the term multiple regression, i had my tube light switched on.

Thank you again.
 
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