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STAT 1043 Homework 9

This document provides instructions for a homework assignment on regression analysis. It includes two practice problems - the first asks students to analyze the relationship between age and selling price of used cars, and the second examines the relationship between number of client contracts and sales amounts. For each problem, students are asked to determine the regression equation, correlation, estimated values, and standard error of the estimate.

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49 views3 pages

STAT 1043 Homework 9

This document provides instructions for a homework assignment on regression analysis. It includes two practice problems - the first asks students to analyze the relationship between age and selling price of used cars, and the second examines the relationship between number of client contracts and sales amounts. For each problem, students are asked to determine the regression equation, correlation, estimated values, and standard error of the estimate.

Uploaded by

mapleton
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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STAT 1043 Homework 9 –Regression

Please submit through Dropbox by 10:00 pm on Thursday, April 4, 2023

Goal: Work through some light regression analysis and understand the connection to the correlation

Directions:

Please label your solutions properly and write as clearly as you can.
Please ensure that the solutions are written in order.
Collaboration in solving problems on the assignments is acceptable; however, copying assignments is
inappropriate and will be considered academic misconduct.
For the calculation questions, it’s fine to use Excel or other software, but please take a
picture/screenshot of your setup with the final answer or explain what you did on the software in
writing to get your result.
Please do your best to complete the questions on time or let me know in advance if you need more
time.

Activity: (The part to hand in for marks)

1. (8 marks) Note that this question uses the data presented in Homework 7, Question 2. Feel
free to review and refer/build upon your earlier solutions if necessary.
The owner of Downey Ford wants to study the relationship between the age of a car and its
selling price. Listed below is a random sample of 12 used cars sold at the dealership during the
last year. There is an accompanying Excel spreadsheet for you to answer the questions on if you
wish to use it.

Car Age (Years) Selling Price (in thousands of dollars


1 9 8.1
2 7 6.0
3 11 3.6
4 12 4.0
5 8 5.0
6 7 10.0
7 8 7.6
8 11 8.0
9 10 8.0
10 12 6.0
11 6 8.6
12 6 8.0
Recall that the selling price is the dependent variable, and age is the independent variable.
a. (3 marks) Determine the regression equation. Interpret what the values of the slope
and intercept mean in the context of the problem.
b. (1 mark) Use the regression line to estimate the selling price (in thousands) for a used
car that is 10 years old.
c. (2 marks) Use the regression line to estimate the selling price (in thousands) for a used
car that is 25 years old. Briefly discuss the result you get.
d. (2 marks) Determine the standard error of the estimate. Based on this result, do you
think the regression line provides a good estimate in this scenario?

2. (10 marks) Mr. James McWhinney, president of Daniel-James Financial Services, believes there
is a relationship between the number of client contracts and the dollar amount of sales. To
document this assertion, Mr. McWhinney gathered the following sample information. The X
column indicates the number of client contracts last month, and the Y column shows the value
of sales ($ thousands) last month for each client sampled.

Number of Contacts Sales ($ thousands)


(X) (Y)

14 24

12 14

20 28

16 30

46 80

23 30

48 90

50 85

55 120

50 110

The Regression Analysis was performed in Excel, and the results are as follows:
SUMMARY OUTPUT

Regression Statistics

Multiple R 0.975362147

R Square 0.951331317

Adjusted R Square 0.945247731

Standard Error 9.31044574

Observations 10

ANOVA

df SS MS F

Regression 1 13555.42 13555.42 156.3768

Residual 8 693.4752 86.6844

Total 9 14248.9

Standard
Coefficients Error t Stat P-value

Intercept -12.201037 6.559576 -1.86003 0.099925

Number of Contracts 2.1946418 0.1755 12.50507 1.56E-06

a. (2 marks) Determine the correlation coefficient and provide an interpretation in the context
of the problem.
b. (2 marks) Determine the coefficient of determination and provide an interpretation in the
context of the problem.
c. (3 marks) Determine the regression equation. Interpret what the values of the slope and
intercept mean in the context of the problem.
d. (1 mark) Use the regression line to estimate the sales value (in thousands) for a client with
47 contracts.
e. (2 marks) Determine the standard error of the estimate. Based on this result, do you think
the regression line provides a good estimate in this scenario?

Additional Practice Problems (these do not need to be handed in, and are optional/not for marks)
There are no additional problems this week

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