Unit 4 [GB513 : Business Analytics ] Assignment This assignment requires you to us e Excel. There is no template fo r this assignment. Make sure you explain your answers and provide the regr ession output tables for questions 1 and 2.

Question 1 Shown below are rental and leasing revenue fi gures for of fi ce machinery and equipment in the United States over a seven-year period according to the U.S. Census Bureau. Use these data to run a linear regression and then forecast the rental and leasi ng revenue for the year 2012 .

Year Rental and Leasing ($ millions)

2004 (5,860), 2005 (6,632), 2006 (7,125), 2007 (6,000), 2008 (4,380), 2009 (3,326), 2010 (2,642).

Question 2 Suppose a researcher gathered surv ey data from 19 employees and asked the employees to rate their job satisfaction on a scale from 0 to 100 (with 100 being perfectly satis fi ed). Suppose the following data represent the results of this survey. Assume that relationship with supervisor is rated on a scale from 0 to 50 (0 represents poor relati onship and 50 represents an e xcellent relationship), overall quality of the work envir onment is rated on a scale from 0 to 100 (0 represents poor work environment and 100 rep resents an excellent work environment), and opportuni ties for advancement is rated on a scale from 0 to 50 (0 repres ents no opportunities and 50 represents excellent opportunities).

Answer the following questions:

A) What is the regression formula?

B) How reliable do you think the estimates will be based on this formula? How can you tell?

C)Are there any variables that do not appear to be good predictors of Job satisfaction? How can you tell?

D) If a new employee reports that her relationship wit h her supervisor is 40, finds the quality of the work environment to be scored at 75, works 60 hours per week and rates her opportunities for advancement to be at 30, what would you expect her job satisfaction score to be?

Job satisfaction: 55, 20, 85, 65, 45, 70, 35, 60, 95, 65, 85, 10, 75, 80, 50, 90, 75, 45, 65. Relationship with supervisor: 27, 12, 40, 35, 29, 42, 22, 34, 50, 33, 40, 5, 37, 42, 31, 47, 36, 20, 32. Overall quality of work environment: 65, 13, 79, 53, 43, 62, 18, 75, 84, 68, 72, 10, 64, 82, 46, 95, 82, 42, 73. Total hours worked per week: 50, 60, 45, 65, 40, 50, 75, 40, 45, 60, 55, 50, 45, 40, 60, 55, 70, 40, 55. Opportunities for advancement: 42, 28, 7, 48, 32, 41, 18, 32, 48, 11, 33, 21, 42, 46, 48, 30, 39, 22, 12.

Question 3. Investment analysts generally believe the interest rate on bonds is inversel y related to the prime interest rate for loans; that is, bonds perform well when lending rates are down and perform poorly when interest rates are up. Can the bond rate be predicted by the prim e interest rate?

Use the following data to construct a scatter graph and then fit a regression line to the data. Report the regression formula and the r-squared value from the chart (r ight click on the line, select “Add Trendline” and select options to show these metrics).

Bond Rate: 5%, 12, 9, 15, 7. Prime Interest Rate: 16%, 6, 8, 4, 7.