MGT 6203 MODULES 1-6 EXAM
UPDATED QUESTIONS AND CORRECT
ANSWERS.
Given R squared is 0.68. Find the adjusted R squared if the sample size is 600 and number of
independent variables is 10. - ANS 0.675
Which of the following values cannot be R squared value? 0.5, 0.99, 0.003, 1.2 - ANS 1.2
The total deviation at observation (xi, yi) is: - ANS yi - ȳ
How can we detect multicollinearity in a model? - ANS 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? - ANS M-1
T/F: An interaction term is used to model how the synergies between multiple variables impact
the response variable. - ANS True
In Ordinary Least Squares we are trying to minimize: - ANS The sum of squared error
The following formula is which of the following:
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, ∑i(Yhat - Ybar)&2 - ANS Sum of squared regression
An indicator variable is sometimes referred to as a: - ANS Dummy variable
Which of the following is an example of an Interaction Term?
Height*Gender
Height^2
Height - Gender
Height + Gender - ANS 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. - ANS False
T/F: An interaction term is used to model how the synergies between multiple variables impact
the response variable - ANS 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. - ANS 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.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
UPDATED QUESTIONS AND CORRECT
ANSWERS.
Given R squared is 0.68. Find the adjusted R squared if the sample size is 600 and number of
independent variables is 10. - ANS 0.675
Which of the following values cannot be R squared value? 0.5, 0.99, 0.003, 1.2 - ANS 1.2
The total deviation at observation (xi, yi) is: - ANS yi - ȳ
How can we detect multicollinearity in a model? - ANS 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? - ANS M-1
T/F: An interaction term is used to model how the synergies between multiple variables impact
the response variable. - ANS True
In Ordinary Least Squares we are trying to minimize: - ANS The sum of squared error
The following formula is which of the following:
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, ∑i(Yhat - Ybar)&2 - ANS Sum of squared regression
An indicator variable is sometimes referred to as a: - ANS Dummy variable
Which of the following is an example of an Interaction Term?
Height*Gender
Height^2
Height - Gender
Height + Gender - ANS 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. - ANS False
T/F: An interaction term is used to model how the synergies between multiple variables impact
the response variable - ANS 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. - ANS 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.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
