1. An interesting marketing research effort has recently been reported, which incorporates within the variables that predict consumer satisfaction from a product not only attributes of the product itself but also characteristics of the consumer who buys the product. In particular, a regression model was developed, and found successful, regressing consumer satisfaction S on a consumer's materialism Mmeasured on a psychologically devised scale. For satisfaction with the purchase of sunglasses, the estimate of beta, the slope of S with respect to M, was b = -2.20. The reported t statistic was -2.53. The sample size was n = 54.7 Is this regression statistically signi?cant? Explain the ?ndings.
2. A regression analysis was carried out of returns on stocks (Y) versus the ratio of book to market value (X). The resulting prediction equation is Y = 1.21 + 3.1X (2.89) where the number in parentheses is the standard error of the slope estimate. The sample size used is n = 18. Is there evidence of a linear relationship between returns and book to market value?