# Use the data below to answer the following questions.12,8,4,5 X:1,2,3,4 a.Draw a scatter plot of X on Y b.Calculate the sample estimates of 0 and 1…

1.    Use the data below to answer the following questions.

Y:12,8,4,5

X:1,2,3,4

a.    Draw a scatter plot of X on Y

b.    Calculate the sample estimates of β0 and β1

Estimated regression equation:______________________

c.    Draw the estimated regression of part (b) on part (a)’s graph

d.    Interpret the estimates of β0 and β1

Intercept:

Slope:

e.    Find the predicted value when X=5

f.     Estimate and interpret the coefficient of determination R2

R2=

Interpretation:

2.    Creating your own data. Open a Stata do file then copy and execute the following code:

clear all

set obs 100

gen x = rnormal()

gen u = rnormal()

keep if x>0

gen y = 10+15*x + 5*u

reg y x

twoway (scatter y x) (lfit y x)

a.    Paste the Stata output here (main window):

b.    Paste the graph here:

c.    Look closely and the data and the output and explain briefly what each line of code does.

i.              set obs 100

ii.             gen x = rnormal()

iii.           gen u = rnormal()

iv.            keep if x>0

v.             gen y = 10+15*x + 5*u

vi.            reg y x

vii.          twoway (scatter y x) (lfit y x)