Develop an estimated regression equation using trade price and speed of execution to predict overall satisfaction with the broker.

The American Association of Individual Investors (AAII) On-Line Discount Broker Survey polls members on their experiences with discount brokers. As part of the survey, members were asked to rate the quality of the speed of execution with their broker as well as provide an overall satisfaction rating for electronic trades. Possible responses (scores) were no opinion ( 0 ), unsatisfied (I), somewhat satisfied (2), satisfied (3), and very satisfied (4). For each broker summary scores were computed by calculating a weighted average of the scores provided by each respondent. A portion of the survey results follow (AAII website, February 7, 2012).

$$\begin{array}{lcc}\text { Brokerage } & \text { Speed } & \text { Satisfaction } \\ \text { Scottrade, Inc. } & 3.4 & 3.5 \\ \text { Charles Schwab } & 3.3 & 3.4 \\ \text { Fidelity Brokerage Services } & 3.4 & 3.9 \\ \text { TD Ameritrade } & 3.6 & 3.7 \\ \text { E"Trade Financial } & 3.2 & 2.9 \\ \text { Vanguard Brokerage Services } & 3.8 & 2.8 \\ \text { USAA Brokerage Services } & 3.8 & 3.6 \\ \text { Thinkorswim } & 2.6 & 2.6 \\ \text { Wells Fargo Investments } & 2.7 & 2.3 \\ \text { Interactive Brokers } & 4.0 & 4.0 \\ \text { Zecco.com } & 2.5 & 2.5\end{array}$$

a. Develop a scatter diagram for these data with the speed of execution as the independent variable.

b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables?

c. Develop the least squares estimated regression equation.

d. Provide an interpretation for the slope of the estimated regression equation.

e. Suppose Zecco.com developed new software to increase their speed of execution rating. If the new software is able to increase their speed of execution rating from the current value of 2.5 to the average speed of execution rating for the other 10 brokerage firms that were surveyed, what value would you predict for the overall satisfaction rating?

The American Association of Individual Investors (AAII) polls its subscribers on a weekly basis to determine the number who are bullish, bearish, or neutral on the short-term prospects for the stock market. Their findings for the week ending March 2, 2006, are consistent with the following sample results (AAII website, March 7, 2006).

$$\text{Bullish} ~~ 409 ~~~~~~~\text{Neutral} ~~ 299~~~~~~~ \text{Bearish}~~ 291$$

Develop a point estimate of the following population parameters.

The proportion of all AAII subscribers who are neutral on the stock market.

Finger Lakes Investments has developed a new electronic trading system and would like to predict overall customer satisfaction assuming they can provide satisfactory levels of service levels (3) for both trade price and speed of execution. Use the estimated repression equation developed in part (a) to predict overall satisfaction level for Finger Lakes Investments if they can achieve these performance levels.

The American Association of Individual Investors conducts a weekly survey of its members to measure the percentage who are bullish, bearish, and neutral on the stock market for the next six months. For the week ending November 7, 2012, the survey results showed $38.5 \%$ bullish, $21.6 \%$ neutral, and $39.9 \%$ bearish. Consider these results are based on a sample of 300 AAII members.

c. Would you feel comfortable extending these results to all investors? Why or why not?

The American Association of Individual Investors (AAII) polls its subscribers on a weekly basis to determine the number who are bullish, bearish, or neutral on the short-term prospects for the stock market. Their findings for the week ending March 2, 2006, are consistent with the following sample results (AAII website, March 7, 2006).

$$\text{Bullish} ~~ 409 ~~~~~~~\text{Neutral} ~~ 299~~~~~~~ \text{Bearish}~~ 291$$

Develop a point estimate of the following population parameters.

The proportion of all AAII subscribers who are bearish on the stock market.

You decide also to conduct a qualitative analysis based on the factors summarized by the American Association of Individual Investors (AAII). According to your understanding, a company with less competition is considered to be _____ risky than companies with multiple competitors.

The American Association of Individual Investors (AAII) polls its subscribers on a weekly basis to determine the number who are bullish, bearish, or neutral on the short-term prospects for the stock market. Their findings for the week ending March 2, 2006, are consistent with the following sample results (AAII website, March 7, 2006).

$$\text{Bullish} ~~ 409 ~~~~~~~\text{Neutral} ~~ 299~~~~~~~ \text{Bearish}~~ 291$$

Develop a point estimate of the following population parameters.

The proportion of all AAII subscribers who are bullish on the stock market.

Broker Satisfaction. The American Association of Individual Investors (AAII) On-Line Discount Broker Survey polls members on their experiences with discount brokers. As part of the survey, members were asked to rate the quality of the speed of execution with their broker as well as provide an overall satisfaction rating for electronic trades. Possible responses (scores) were no opinion $(0)$, unsatisfied (1), somewhat satisfied (2), satisfied (3), and very satisfied (4). For each broker summary scores were computed by calculating a weighted average of the scores provided by each respondent. A portion of the survey results follow (AAII website, February 7, 2012).

$$\begin{array}{lcc}\text { Brokerage } & \text { Speed } & \text { Satisfaction } \\ \text { Scottrade, Inc. } & 3.4 & 3.5 \\ \text { Charles Schwab } & 3.3 & 3.4 \\ \text { Fidelity Brokerage Services } & 3.4 & 3.9 \\ \text { TD Ameritrade } & 3.6 & 3.7 \\ \text { E*Trade Financial } & 3.2 & 2.9 \\ \text { Vanguard Brokerage Services } & 3.8 & 2.8 \\ \text { USAA Brokerage Services } & 3.8 & 3.6 \\ \text { Thinkorswim } & 2.6 & 2.6 \\ \text { Wells Fargo Investments } & 2.7 & 2.3 \\ \text { Interactive Brokers } & 4.0 & 4.0 \\ \text { Zecco.com } & 2.5 & 2.5\end{array}$$

b. What does the scatter diagram developed in part (a) indicate about the relationship between the two variables?

Broker Satisfaction. The American Association of Individual Investors (AAII) On-Line Discount Broker Survey polls members on their experiences with discount brokers. As part of the survey, members were asked to rate the quality of the speed of execution with their broker as well as provide an overall satisfaction rating for electronic trades. Possible responses (scores) were no opinion $(0)$, unsatisfied (1), somewhat satisfied (2), satisfied (3), and very satisfied (4). For each broker summary scores were computed by calculating a weighted average of the scores provided by each respondent. A portion of the survey results follow (AAII website, February 7, 2012).

$$\begin{array}{lcc}\text { Brokerage } & \text { Speed } & \text { Satisfaction } \\ \text { Scottrade, Inc. } & 3.4 & 3.5 \\ \text { Charles Schwab } & 3.3 & 3.4 \\ \text { Fidelity Brokerage Services } & 3.4 & 3.9 \\ \text { TD Ameritrade } & 3.6 & 3.7 \\ \text { E*Trade Financial } & 3.2 & 2.9 \\ \text { Vanguard Brokerage Services } & 3.8 & 2.8 \\ \text { USAA Brokerage Services } & 3.8 & 3.6 \\ \text { Thinkorswim } & 2.6 & 2.6 \\ \text { Wells Fargo Investments } & 2.7 & 2.3 \\ \text { Interactive Brokers } & 4.0 & 4.0 \\ \text { Zecco.com } & 2.5 & 2.5\end{array}$$

e. Suppose Zecco.com developed new software to increase their speed of execution rating. If the new software is able to increase their speed of execution rating from the current

Federal Employee Satisfaction. The United States Office of Personnel Management (OPM) manages the civil service of the federal government. Results from its annual Federal Employee Viewpoint Survey (FEVS) are used to measure employee satisfaction on several work aspects, including Job Satisfaction, Pay Satisfaction, Organization Satisfaction, and an overall measure of satisfaction referred to as Global Satisfaction. In each case a 100-point scale with higher values indicating greater satisfaction is used (OPM website). Scores for Global Satisfaction. Job Satisfaction, Pay Satisfaction, and Organization Satisfaction for a sample of 65 employees are provided in the file Satisfaction.

b. Predict the overall Global Satisfaction score for an employee with a Job Satisfaction score of 72, a Pay Satisfaction score of 54, and an Organization Satisfaction score of 53.

Resorts & Spas, a magazine devoted to upscale vacations and accommodations, published its Reader’s Choice List of the top 20 independent beachfront boutique hotels in the world. The data shown are the scores received by these hotels based on the results from Resorts & Spas’ annual Readers’ Choice Survey. Each score represents the percentage of respondents who rated a hotel as excellent or very good on one of three criteria (comfort, amenities, and in-house dining). An overall score was also reported and used to rank the hotels. The highest ranked hotel, the Muri Beach Odyssey, has an overall score of 94.3, the highest component of which is 97.7 for in-house dining.

$$\begin{array}{lcccc} \text { Hotel } & \text { Overall } & \text { Comfort } & \text { Amenities } & \text { In-House Dining } \\ \text { Muri Beach Odyssey } & 94.3 & 94.5 & 90.8 & 97.7 \\ \text { Pattaya Resort } & 92.9 & 96.6 & 84.1 & 96.6 \\ \text { Sojourner's Respite } & 92.8 & 99.9 & 100.0 & 88.4 \\ \text { Spa Carribe } & 91.2 & 88.5 & 94.7 & 97.0 \\ \text { Penang Resort and Spa } & 90.4 & 95.0 & 87.8 & 91.1 \\ \text { Mokihana Hokele } & 90.2 & 92.4 & 82.0 & 98.7 \\ \text { Theo's of Cape Town } & 90.1 & 95.9 & 86.2 & 91.9 \\ \text { Cap d'Agde Resort } & 89.8 & 92.5 & 92.5 & 88.8 \\ \text { Spirit of Mykonos } & 89.3 & 94.6 & 85.8 & 90.7 \\ \text { Turismo del Mar } & 89.1 & 90.5 & 83.2 & 90.4 \end{array}$$

$$\begin{array}{lcccc} \text { Hotel } & \text { Overall } & \text { Comfort } & \text { Amenities } & \text { In-House Dining } \\ \text { Hotel Iguana } & 89.1 & 90.8 & 81.9 & 88.5 \\ \text { Sidi Abdel Rahman Palace } & 89.0 & 93.0 & 93.0 & 89.6 \\ \text { Sainte-Maxime Quarters } & 88.6 & 92.5 & 78.2 & 91.2 \\ \text { Rotorua Inn } & 87.1 & 93.0 & 91.6 & 73.5 \\ \text { Club Lapu-Lapu } & 87.1 & 90.9 & 74.9 & 89.6 \\ \text { Terracina Retreat } & 86.5 & 94.3 & 78.0 & 91.5 \\ \text { Hacienda Punta Barco } & 86.1 & 95.4 & 77.3 & 90.8 \\ \text { Rendezvous Kolocep } & 86.0 & 94.8 & 76.4 & 91.4 \\ \text { Cabo de Gata Vista } & 86.0 & 92.0 & 72.2 & 89.2 \\ \text { Sanya Deluxe } & 85.1 & 93.4 & 77.3 & 91.8 \end{array}$$

Determine the estimated multiple linear regression equation that can be used to predict the overall score given the scores for comfort, amenities, and in-house dining.

Use the $t$ test to determine the significance of each independent variable. What is your conclusion at the .05 level of significance?

Dixie Showtime Movie Theaters, Inc., owns and operates a chain of cinemas in several markets in the southern United States. The owners would like to estimate weekly gross revenue as a function of advertising expenditures. Data for a sample of eight markets for a recent week follow:

$$\begin{array}{lccc} \text { Market } & \begin{array}{c} \text { Weekly Gross } \\ \text { Revenue }(\mathbf{\$ 1 0 0 s}) \end{array} & \begin{array}{c} \text { Television } \\ \text { Advertising } \\ \mathbf{( \$ 1 0 0 s )} \end{array} & \begin{array}{c} \text { Newspaper } \\ \text { Advertising } \end{array} \\ \text { Mobile } & 101.3 & 5.0 & 100 \text { s) } \\ \text { Shreveport } & 51.9 & 3.0 & 1.5 \\ \text { Jackson } & 74.8 & 4.0 & 3.0 \\ \text { Birmingham } & 126.2 & 4.3 & 1.5 \\ \text { Little Rock } & 137.8 & 3.6 & 4.3 \\ \text { Biloxi } & 101.4 & 3.5 & 4.0 \\ \text { New Orleans } & 237.8 & 5.0 & 2.3 \\ \text { Baton Rouge } & 219.6 & 6.9 & 8.4 \\ \hline \end{array}$$

How much of the variation in the sample values of weekly gross revenue does the model in the previous part explain?