Corporate Profits: To study the relationship of advertising and capital investment to corporate profits, the following data, recorded in units of $100,000, were collected for 10 medium-sized firms in the same year. The variable y represents profit for the year, x1 represents capital investment, and x2 represents advertising expenditures. y x1 x2 y x1 x2
15 25 4 1 20 0
16 1 5 16 12 4
2 6 3 18 15 5
3 30 1 13 6 4
12 29 2 2 16 2

1. Write down the regression model.

2. Write down the prediction equation.

3. Predict y when X1 = 25 and X2 = 4; then what is the residual?

4. SSE =
S2 =
S =
R2 =
now interpret R2.

5. Write down 95% confidence intervals for and .

6. Test if the years of experience (X1) is a significant variable.

7. Test if the years of schooling (X2) is a significant variable

8. Find the 95% confidence interval for E(Y) when X1 = 25 and X2 = 4.

9. Find the 95% prediction interval for Y when X1 = 25 and X2 = 4.