document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=254807>Question 254807</A>: <I><SPAN STYLE=\"word-break: break-all;\"> An insurance company wishes to examine the relationship between income (in $,000) and the amount of life insurance (in $,000) held by families. The company drew a simple random sample of families and obtained the following results:\r<BR>\n" );
document.write( "\n" );
document.write( "(Family)	(Income)	(Amount of life insurance)<BR>\n" );
document.write( "A,	80,	120<BR>\n" );
document.write( "B,	100,	200<BR>\n" );
document.write( "C,	110,	220<BR>\n" );
document.write( "D,	90,	160<BR>\n" );
document.write( "E,	80,	180<BR>\n" );
document.write( "F,	140,	270<BR>\n" );
document.write( "G,	110,	150<BR>\n" );
document.write( "H,	100,	240<BR>\n" );
document.write( "I,	80,	160<BR>\n" );
document.write( "J,	100,	210\r<BR>\n" );
document.write( "<BR>\n" );
document.write( "\n" );
document.write( "QUESTION a<BR>\n" );
document.write( "What is the least squares estimate of the slope? <BR>\n" );
document.write( "Answer should be to four decimal places e.g. 1.2345. \r<BR>\n" );
document.write( "\n" );
document.write( "QUESTION b<BR>\n" );
document.write( "What is the least squares estimate of the Y intercept? <BR>\n" );
document.write( "Answer should be to four decimal places e.g. 1.2345. \r<BR>\n" );
document.write( "\n" );
document.write( "QUESTION c<BR>\n" );
document.write( "What is the prediction for the amount of life insurance for a family whose income is $85,000? \r<BR>\n" );
document.write( "\n" );
document.write( "QUESTION d<BR>\n" );
document.write( "What would be the residual (error) term for a family income of $90,000?  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #187154 by </B><A HREF=/tutors/aboutme.mpl?userid=stanbon><B>stanbon(75887)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=stanbon><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/images/nopicture.jpg><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=187154\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> An insurance company wishes to examine the relationship between income (in $,000) and the amount of life insurance (in $,000) held by families. The company drew a simple random sample of families and obtained the following results: <BR>\n" );
document.write( "(Family) (Income) (Amount of life insurance)<BR>\n" );
document.write( "A, 80, 120<BR>\n" );
document.write( "B, 100, 200<BR>\n" );
document.write( "C, 110, 220<BR>\n" );
document.write( "D, 90, 160<BR>\n" );
document.write( "E, 80, 180<BR>\n" );
document.write( "F, 140, 270<BR>\n" );
document.write( "G, 110, 150<BR>\n" );
document.write( "H, 100, 240<BR>\n" );
document.write( "I, 80, 160<BR>\n" );
document.write( "J, 100, 210<BR>\n" );
document.write( "----<BR>\n" );
document.write( "I ran a Linear Regression program on a TI calculator<BR>\n" );
document.write( "to get the following answers:<BR>\n" );
document.write( "---- \r<BR>\n" );
document.write( "\n" );
document.write( "QUESTION a<BR>\n" );
document.write( "What is the least squares estimate of the slope?<BR>\n" );
document.write( "Ans: 1. 8155 <BR>\n" );
document.write( "QUESTION b<BR>\n" );
document.write( "What is the least squares estimate of the Y intercept?<BR>\n" );
document.write( "Ans: 11.2621 <BR>\n" );
document.write( "QUESTION c<BR>\n" );
document.write( "What is the prediction for the amount of life insurance for a family whose income is $85,000? <BR>\n" );
document.write( "f(85) = 165.58<BR>\n" );
document.write( "QUESTION d<BR>\n" );
document.write( "What would be the residual (error) term for a family income of $90,000?<BR>\n" );
document.write( "Ans: Observed - Estimated<BR>\n" );
document.write( "160-174.66 = -14.66<BR>\n" );
document.write( "=============================<BR>\n" );
document.write( "Cheers,<BR>\n" );
document.write( "Stan H. <BR>\n" );
document.write( " </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );