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STA 207 CH3 Question & Answer

This document contains sample problems and questions related to linear regression analysis. It includes examples of calculating forecasted costs, salaries, and monthly electric bills using regression equations. Scatter plots are developed and correlation coefficients, coefficients of determination, trend lines, and predicted values are determined. The purpose of a scatter diagram and residual plot are described. The four assumptions of a regression model are also listed.

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52 views3 pages

STA 207 CH3 Question & Answer

This document contains sample problems and questions related to linear regression analysis. It includes examples of calculating forecasted costs, salaries, and monthly electric bills using regression equations. Scatter plots are developed and correlation coefficients, coefficients of determination, trend lines, and predicted values are determined. The purpose of a scatter diagram and residual plot are described. The four assumptions of a regression model are also listed.

Uploaded by

Kim Erich
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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III.

Problem Question
1.
(a) If the temperature averaged 48 degrees during December, what is the forecasted cost of
December's electric bill?
(b) If the temperature averaged 38 degrees during January, what is the forecasted cost of
January's electric bill?
(a) $227.19 - $1.45(48) = $157.59
(b) $227.19 - $1.45(38) = $172.09
2.
(a) If a teacher has 10 years of experience, what is the forecasted salary?
(b) If a teacher has 5 years of experience, what is the forecasted salary?
(c) Based on this equation, for every additional year of service, a teacher could expect his or her
salary to increase by how much?
(a) $23,313.22 + $1,210.89(10) = $35,422.12
(b) $23,313.22 + $1,210.89(5) = $29,367.67
(c) $1,210.89
3.
(a) If December has an average temperature of 45 degrees and the heater is 2 years old with
insulation that is 6 inches thick, what is the forecasted monthly electric bill?
(b) If January has an average temperature of 40 degrees and the heating equipment is 12 years
old with insulation that is 2 inches thick, what is the forecasted monthly electric bill?
(a) $256.89 - 1.45(45) - 11.26(6) + 6.10(2) = $136.28
(b) $256.89 - 1.45(40) - 11.26(2) + 6.10(12) = $249.57
4.
(a) Develop a scatter diagram.
(b) What is the correlation coefficient?
(c) What is the coefficient of determination?
a. (b) .936
(c) .877
5.
(a) Develop a scatter diagram.
(b) Determine the correlation coefficient.
(c) Determine the coefficient of determination.
(d) Determine the least squares trend line.
(e) Determine the predicted value of sales for 2100 employees.

a.

(b) 0.937
(c) 0.878
(d) Y = -1663.03 + .889X1
(e) 203.87 or $203,870

6.
(a) Determine the least squares regression equation.
(b) Using the results of part (a), find the estimated lost sales revenues if the total number of
security guard hours is 800.
(c) Calculate the coefficient of correlation.
(d) Calculate the coefficient of determination.
(a) Least squares equation: Y = .3780 + .0014X
(b) Y = .3780 + 0.0014(800) = 1.498
(c) Coefficient of correlation = 0.955
(d) Coefficient of determination = 0.9121
IV. Essay Question
1. Describe the purpose and structure of a scatter diagram.
 A scatter diagram is a graphical method used to investigate the relationship
between variables. Normally, the independent variable is plotted on the
horizontal axis, and the dependent variable is plotted on the vertical axis.
2. Explain what r 2 is?
 It is a value between 0 and +1 and measures the proportion of variability in Y
that is explained by the regression equation.
3. What can be said about a correlation coefficient of +1?
 This is a perfect positive correlation where all of the values lie in a straight line.
The positive value indicates that as X increases in value, so does Y.
4. Describe a residual plot
 A residual plot is a plot of the error terms against the independent variable.
Residual plots that show patterns often indicate violations in the assumptions of
the regression model.
5. List the four assumptions of the regression model.
(1) The errors are independent.
(2) The errors are normally distributed.
(3) The errors have a mean of zero.
(4) The errors have a constant variance (regardless of the value of X).

END

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