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##### QM 3110 Final Study Guide

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Question;3. The transaction Records Access Clearinghouse at Syracuse University reporteddata showing the odds of an Internal Revenue Service audit. The following tableshows the average adjusted gross income reported and the percent of the returnsthat were audited for 20 selected IRS districts.DistrictLos AngelesSacramentoAtlantaBoiseDallasProvidenceSan JoseCheyenneFargoNew OrleansOklahoma CityHoustonPortlandPhoenixAugustaAlbuquerqueGreensboroColumbiaNashvilleBuffaloAdjusted GrossIncome ($)36,66438,84534,88632,51234,53135,99537,79933,87630,51330,17430,06037,15334,91833,29131,50429,19933,07230,85932,56634,296PercentAudited1.31.11.11.1110.90.90.90.90.80.80.70.70.70.60.60.50.50.5a. Develop an estimated regression equation that could be used to predict the percentaudited given the average adjusted gross income reported. How do you interpretthe slope?b. Did the estimated regression equation provide a good fit? Explain.c. Compute the sample correlation coefficient between the percent audited and theadjusted gross income. Use?= 0.05 to test the relationship between percentaudited and adjusted gross income.d. Use the estimated regression equation developed in part (a) to calculate a 95%confidence interval for the expected percent audited for districts with an averageadjusted gross income of $35,000.4. The following table contains 25 observations by year of these variables.yearRevenue perdollarNumber ofofficesProfit Margin123456789101112131415161718192021222324253.923.613.323.073.063.113.213.263.423.423.453.583.663.783.823.974.074.254.414.494.704.584.694.714.7872986855663665066450640263686340634963526361636965466672689071157327754679318097846887178991917993180.750.710.660.610.70.720.770.740.90.820.750.770.780.840.790.700.680.720.550.630.560.410.510.470.32a. Develop an estimated regression equation that can be used to predict the annualprofit margin using the information about revenue per dollar and number ofoffices.b. Interpret coefficients. How profit margin will change when the number of officesincreases by 100?c. Compute the coefficient of determination and interpret it.d. At 95% confidence, determine which variables are significant and which are not.e. At 95% confidence, is the regression model significant?f. If in a given year, the number of offices is 9000 and revenue per dollar is $5, whatwould you expect the profit margin to be?5.You are given the following information regarding four items.20002006ItemABCDa.b.c.d.e.Price$ 2.501.000.7510.00Quantity141211Price$ 4.651.253.5025.00Quantity191223Calculate the price relative index for each item, using 2000 as the base year.Calculate the unweighted aggregate price index.Calculate a Laspeyres index.Calculate a Paasche index.Construct a weighted aggregate quantity index using 2000 as the base year andprice as the weight.

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