Question

Actor Steven Seagal has demanded an exorbitant salary to star in the movie, “The Expendables, Part 4”.   One analyst thinks that the overall Rotten Tomatoes score of a movie determines its ultimate earnings. Another analyst thinks that Seagal’s presence alone will boost earnings, regardless of the quality of the movie.    To test both of these theories, the following data is collected for six action movies:

Earnings (millions)	Rotten Tomatoes Rating	With Seagal (1 = yes, 0 = no)
55	80	0
10	15	0
72	92	1
66	71	1
14	20	0
22	41	1

A multiple regression is performed and these are the results:
SUMMARY OUTPUT

Regression Statistics
Multiple R	0.67
R Square	0.85
Adjusted R Square	0.70
Standard Error	19.07
Observations	10.00

	Coefficients	Standard Error
Intercept	4.23	7.41
Rotten Tomatoes Rating	0.80	0.14
With Seagal (1 = yes, 0 = no)	3.35	8.32

Determine the statistical significance of the two independent variables. Assume a t-statistic with an absolute value greater than 2 is statistically significant.

Rotten Tomatoes is significant and Seagal is not significant

Rotten Tomoatoes is not significant and Seagal is significant

Both Rotten Tomatoes and Seagal are significant

Neither Rotten Tomatoes nor Seagal is significant.

Answer 1