Question 254807: 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:
(Family) (Income) (Amount of life insurance)
A, 80, 120
B, 100, 200
C, 110, 220
D, 90, 160
E, 80, 180
F, 140, 270
G, 110, 150
H, 100, 240
I, 80, 160
J, 100, 210
QUESTION a
What is the least squares estimate of the slope?
Answer should be to four decimal places e.g. 1.2345.
QUESTION b
What is the least squares estimate of the Y intercept?
Answer should be to four decimal places e.g. 1.2345.
QUESTION c
What is the prediction for the amount of life insurance for a family whose income is $85,000?
QUESTION d
What would be the residual (error) term for a family income of $90,000?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! 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:
(Family) (Income) (Amount of life insurance)
A, 80, 120
B, 100, 200
C, 110, 220
D, 90, 160
E, 80, 180
F, 140, 270
G, 110, 150
H, 100, 240
I, 80, 160
J, 100, 210
----
I ran a Linear Regression program on a TI calculator
to get the following answers:
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QUESTION a
What is the least squares estimate of the slope?
Ans: 1. 8155
QUESTION b
What is the least squares estimate of the Y intercept?
Ans: 11.2621
QUESTION c
What is the prediction for the amount of life insurance for a family whose income is $85,000?
f(85) = 165.58
QUESTION d
What would be the residual (error) term for a family income of $90,000?
Ans: Observed - Estimated
160-174.66 = -14.66
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Cheers,
Stan H.
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