Graham regresses variable Y on four independent variables:  X1, X2, X3 and
X4.  He obtains the following output:
图片1

Graham also tries a regression of Y against X1 and obtains the following
results:
图片2
Answer the following questions:


a)    Why do you think there is not a big difference between the R-Square of
the two regressions?


b)    Graham plots the variable X1 against the variable X2 and obtains the
following graph.  What do you think this means?  How does it affect the
regression?
图片3

c)    Would you conclude that there is no significant relationship between Y
and X2?

d)    Which of the two regressions would you use to predict Y?




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