Name _________KEY_________________________________
Directions: This is a closed book exam. Your work must be your own; you may neither give nor receive help. You must complete all questions. Unless you show (all) your work it will be impossible to receive part credit. You have 50 minutes for the exam.
Table 1 


Model A 
Model B 
Constant 
475.4765 
638.4401 
CEOTEN (years as CEO) 
48.9271 
46.8203 
CEOTENSQ (square of CEOTEN) 
1.3106 
1.2707 
MKTVAL (market value of the firm) 
0.0197 

SALES (firm sales) 
0.0177 

PROFITS (firm profits) 
0.0818 

Rsquared 
0.2323 
0.0496 
Sum of Squared Residuals 
46647708 
57754227 
S.E. of Regression 
522.2965 
576.1257 
Table 2
Coefficient Covariance Matrix

C 
CEOTEN 
CEOTENSQ 
MKTVAL 
SALES 
PROFITS 
C 
6931.141 
976.5751 
26.35528 
0.038740 
0.145225 
0.109657 
CEOTEN 
976.5751 
220.9544 
6.888693 
0.013729 
0.002779 
0.215158 
CEOTENSQ 
26.35528 
6.888693 
0.249441 
0.000264 
9.59E05 
0.006312 
MKTVAL 
0.038740 
0.013729 
0.000264 
0.000241 
1.62E05 
0.003339 
SALES 
0.145225 
0.002779 
9.59E05 
1.62E05 
0.000117 
0.001170 
PROFITS 
0.109657 
0.215158 
0.006312 
0.003339 
0.001170 
0.072416 
This is an Ftest for the joint significance of the three coefficients. The critical F at the 5% level and 3, 171 degrees of freedom is 2.65. The observed F is given by [(5775422746647708)/3]/(46647708/171) = 13.57. We should reject the null that all three coefficients are zero.