MGT 6203 Modules 1-6 Exam Questions with Correct Answers Latest Update 2025-2026
Given R squared is 0.68. Find the adjusted R squared if the sample size is 600 and number of
independent variables is 10. - Answers 0.675
Which of the following values cannot be R squared value? 0.5, 0.99, 0.003, 1.2 - Answers 1.2
The total deviation at observation (xi, yi) is: - Answers yi - ȳ
How can we detect multicollinearity in a model? - Answers Variance Inflation factor (VIF) and
Correlation matrix
If you convert a categorical variable with M categories into dummy variables, how many dummy
variables are created? - Answers M-1
T/F: An interaction term is used to model how the synergies between multiple variables impact
the response variable. - Answers True
In Ordinary Least Squares we are trying to minimize: - Answers The sum of squared error
The following formula is which of the following:
∑i(Yhat - Ybar)&2 - Answers Sum of squared regression
An indicator variable is sometimes referred to as a: - Answers Dummy variable
Which of the following is an example of an Interaction Term?
Height*Gender
Height^2
Height - Gender
Height + Gender - Answers Height*Gender
T/F: In a linear regression model with one qualitative (categorical) predicting variable with 4
values, we need to include 4 dummy variables. - Answers False
T/F: An interaction term is used to model how the synergies between multiple variables impact
the response variable - Answers True
Using the following regression equation, determine which statement is correct.
Price = b0 + b1*lotsize + b2*lotsize^2
Coefficients b1 and b2 can be interpreted individually because when lotsize is increased by 1
, unit, it is not possible (or meaningful) to hold lotsize^2 constant.
Coefficients b1 and b2 can be interpreted individually because when lotsize is decreased by 1
unit, it is not possible (or meaningful) to hold lotsize^2 constant.
Coefficients b1 and b2 cannot be interpreted individually because when lotsize is increased by 1
unit, it is not possible (or meaningful) to hold lotsize^2 constant.
Coefficients b1 and b2 cannot be interpreted individually because when lotsize is increased by 1
unit, it is possible (or meaningful) to hold lotsize^2 constant. - Answers Coefficients b1 and b2
cannot be interpreted individually because when lotsize is increased by 1 unit, it is not possible
(or meaningful) to hold lotsize^2 constant.
T/F: In the case of a linear-log model, increasing X by 1 percent is almost equivalent to
increasing (natural) log(X) by 0.01 units - Answers True
Which of the following are the main purpose of log-transformation? Choose all the right
answers.
Achieve a more exponential relationship
Make a distribution more normal
Increase the variance
Get a better fit such as higher R-squared - Answers Make a distribution more normal
Get a better fit such as higher R-squared
Select the equation that can be used for a linear-log model:
Y=b0+b1∗X
Y=b0+b1∗log(X)
log(Y)=b0+b1∗X
log(Y)=b0+b1∗log(X) - Answers Y=b0+b1∗log(X)
Select the equation that can be used for a log-log model:
Y=b0+b1∗X
Given R squared is 0.68. Find the adjusted R squared if the sample size is 600 and number of
independent variables is 10. - Answers 0.675
Which of the following values cannot be R squared value? 0.5, 0.99, 0.003, 1.2 - Answers 1.2
The total deviation at observation (xi, yi) is: - Answers yi - ȳ
How can we detect multicollinearity in a model? - Answers Variance Inflation factor (VIF) and
Correlation matrix
If you convert a categorical variable with M categories into dummy variables, how many dummy
variables are created? - Answers M-1
T/F: An interaction term is used to model how the synergies between multiple variables impact
the response variable. - Answers True
In Ordinary Least Squares we are trying to minimize: - Answers The sum of squared error
The following formula is which of the following:
∑i(Yhat - Ybar)&2 - Answers Sum of squared regression
An indicator variable is sometimes referred to as a: - Answers Dummy variable
Which of the following is an example of an Interaction Term?
Height*Gender
Height^2
Height - Gender
Height + Gender - Answers Height*Gender
T/F: In a linear regression model with one qualitative (categorical) predicting variable with 4
values, we need to include 4 dummy variables. - Answers False
T/F: An interaction term is used to model how the synergies between multiple variables impact
the response variable - Answers True
Using the following regression equation, determine which statement is correct.
Price = b0 + b1*lotsize + b2*lotsize^2
Coefficients b1 and b2 can be interpreted individually because when lotsize is increased by 1
, unit, it is not possible (or meaningful) to hold lotsize^2 constant.
Coefficients b1 and b2 can be interpreted individually because when lotsize is decreased by 1
unit, it is not possible (or meaningful) to hold lotsize^2 constant.
Coefficients b1 and b2 cannot be interpreted individually because when lotsize is increased by 1
unit, it is not possible (or meaningful) to hold lotsize^2 constant.
Coefficients b1 and b2 cannot be interpreted individually because when lotsize is increased by 1
unit, it is possible (or meaningful) to hold lotsize^2 constant. - Answers Coefficients b1 and b2
cannot be interpreted individually because when lotsize is increased by 1 unit, it is not possible
(or meaningful) to hold lotsize^2 constant.
T/F: In the case of a linear-log model, increasing X by 1 percent is almost equivalent to
increasing (natural) log(X) by 0.01 units - Answers True
Which of the following are the main purpose of log-transformation? Choose all the right
answers.
Achieve a more exponential relationship
Make a distribution more normal
Increase the variance
Get a better fit such as higher R-squared - Answers Make a distribution more normal
Get a better fit such as higher R-squared
Select the equation that can be used for a linear-log model:
Y=b0+b1∗X
Y=b0+b1∗log(X)
log(Y)=b0+b1∗X
log(Y)=b0+b1∗log(X) - Answers Y=b0+b1∗log(X)
Select the equation that can be used for a log-log model:
Y=b0+b1∗X
