Question

Please answer the following questions.
1. What types of business situations or problems might best lend themselves to simple linear regression and what types may not? Why and why not?
2. A health researcher is interested in determining whether or not the speed at which people walk is related to their cholesterol levels. He picks 100 adult volunteers at random, checks their cholesterol levels, and then times each one while they walk a stretch of 100 yards. He is amazed at the results: a simple regression between the walk times and the cholesterol levels has an R2 of 0.98 and the slope of the regression line is 0.7. Would he be justified in concluding that walking slowly may cause high cholesterol or that high cholesterol may affect walking speed? Discuss why or why not.
3. What types of business situations or problems might best lend themselves to multiple linear regression? What types may not? Explain.
4. Give an example based on your experience of a situation in which using a multiple regression model or non-linear regression model may have helped you make a better decision.