For this, problem, please include the excel procedure you used to arrive at an answer (screenshots,...

Free

80.2K

Verified Solution

Question

Basic Math

For this, problem, please include the excel procedure you usedto arrive at an answer (screenshots, explanation, actual file,etc.).

BrokerageOverall Satisfaction with Electronic TradesSatisfaction with Trade PriceSatisfaction with Speed of Execution
Scottrade, Inc.3.53.43.4
Charles Schwab3.43.23.3
Fidelity Brokerage Services3.93.13.4
TD Ameritrade3.72.93.6
E*Trade Financial2.92.93.2
(Not listed)2.72.53.2
Vanguard Brokerage Services2.82.63.8
USAA Brokerage Services3.62.43.8
Thinkorswim2.62.62.6
Wells Fargo Investments2.32.32.7
Interactive Brokers4.03.74.0
Zecco.com2.52.52.5
Firstrade Securities4.03.03.0
Banc of America Investment Services2.04.01.0

The American Association of Individual Investors (AAII) On-LineDiscount Broker Survey polls members on their experiences withelectronic trades handled by discount brokers. As part of thesurvey, members were asked to rate their satisfaction with thetrade price and the speed of execution, as well as provide anoverall satisfaction rating. Possible responses (scores) were noopinion (0), unsatisfied (1), somewhat satisfied (2), satisfied(3), and very satisfied (4). For each broker, summary scores werecomputed by computing a weighted average of the scores provided byeach respondent. A portion the survey results follow (AAII website, February 7, 2012).

A. Develop an estimated regression equation using trade priceand speed of execution to predict overall satisfaction with thebroker. Interpret the coefficient of determination.

B. Use the t test to determine the significance of eachindependent variable. What are your conclusions at the 0.05 levelof significance?

C. Interpret the estimated regression parameters. Are therelationships indicated by these estimates what you wouldexpect?

D. Finger Lakes Investments has developed a new electronictrading system and would like to predict overall customersatisfaction assuming they can provide satisfactory service levels(3) for both trade price and speed of execution. Use the estimatedregression equation developed in part (a) to predict overallsatisfaction level for Finger Lakes Investments if they can achievethese performance levels.

E. What concerns (if any) do you have with regard to thepossible responses the respondents could select on the survey

Answer & Explanation Solved by verified expert
4.4 Ratings (749 Votes)

(A)Satisfaction(y)=-0.78348+0.557957*Price(x1) +0.734175*speed(x2)

coefficient of determination R2=0.6827, is proportion of variation explained by the model in the dependent/response variable

(B) both the predictor/independent variables are significant as their p-value is less than typical alpha=0.05

(C) Yes, there is positive correlation of predictor variable with the response variable.

(D) for x1=3, x2=3, Satisfaction(y)=-0.78348+0.557957*3 +0.734175*3=3.0929

yes,  Finger Lakes Investments if they can achieve these performance levels.

following regression analysis information has been generated using ms-excel

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.826272
R Square 0.682726
Adjusted R Square 0.62504
Standard Error 0.410845
Observations 14
ANOVA
df SS MS F Significance F
Regression 2 3.99541 1.997705 11.83517 0.001811
Residual 11 1.856733 0.168794
Total 13 5.852143
Coefficients Standard Error t Stat P-value Lower 95% Upper 95%
Intercept -0.78348 0.942279 -0.83147 0.42339 -2.85742 1.290466
Price(x1) 0.557957 0.23317 2.392919 0.035677 0.044753 1.071161
speed(x2) 0.734175 0.155738 4.714163 0.000635 0.391398 1.076953

Satisfaction(y)=-0.78348+0.557957*Price(x1) +0.734175*speed(x2)


Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students