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)