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1) Please fill in each blank by selecting the answer from the Dropdown:

a. When you have 1 million observations and there are only 2 predictors, it is usually better to use statistical learning.

b. When the variance of the error term is very large, it is usually better to use statistical learning.

c. When the relationship between the DV and IVs is linear, it is usually better to use statistical learning.

2)Select True/False for each of the following:

a. A fitted value at an observation point for a linear regression model is a linear combination of the observed response values.

b. In a simple linear regression, the least square regression line may not go through the point

c. For a simple linear regression, R^2 is the squared correlation between the DV and the IV.

d. Bootstrap is a resampling method with replacement.

3)Let be the original sample. Suppose that we obtain a bootstrap sample from this original sample with n observations.

(i) the probability that the 2nd bootstrap observation is ?2 is

(ii) the probability that the 3rd bootstrap observation is ?2 is

(iii) the probability that ?2 is not in the bootstrap sample is

(iv) the probability that s in the bootstrap sample is (v) the probability that the bootstrap sample is (all bootstrap observations are

?2) is

4)Suppose that you wish to invest a fixed sum of money in two financial assets that yield returns of X and Y, respectively, where X and Y are random quantities. You invest some percent of your money in X and the remaining in Y. In general, you would like to the expected return. Since there is variability associated with the returns on these two assets, you may need to the variance of the investment.

5) Identify the predictor variable and the response variable in each of the following situations:

(a) A training director wishes to study the relationship between the duration of training for new recruits and their performance in a skilled job.

Predictor variable:

Response variable:

(b) A market analyst wished to relate the expenditures incurred in promoting a product in test markets and the subsequent amount of product sales.

Predictor variable:

Response variable:

(c) The aim of a study is to relate the carbon monoxide level in blood samples from smokers with the average number of cigarettes they smoke per day.

Predictor variable:

Response variable:

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