Q1 Q2 Exercise 12-24 The owner of Maumee Motors wants to study the relationship
ID: 3219142 • Letter: Q
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Exercise 12-24 The owner of Maumee Motors 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 Maumee Motors during the last year: Selling Price Selling Price Car Age (years) thousands) Car Age (years) thousands) S3.7 S4.4. 3.5 3.5 10 11 8.2 4.0 4.6 5.9 10 13 4.2 3.9 11 13 3.1 10 3.1 a. Determine the correlation coefficient. (Negative answer should be indicated by a minus sign. Round the final answer to 3 decimal places.) b. Determine the coefficient of determination. (Round the final answer to 3 decimal places.) c. Interpret these statistical measures. Does it surprise you that an inverse relationship exists? (Round the final answer to the nearest whole number.) Weak negative (inverse) correlation between age of car and selling price. So, percent of the variation in the selling price is explained by the variation in the age of the car.Explanation / Answer
(Q1)
(a) r = -0.325
(b) 0.106
(c) r = -0.325 indicates a low degree of correlation between age and selling price. The correlation is negative. As the age increases the selling price decreases
(b) r^2 = 0.106 means about 10.6% of the variation in the selling price is explained by the variation in age.
Regression Analysis r² 0.106 n 12 r -0.325 k 1 Std. Error 1.423 Dep. Var. Selling Price ($ Thousands) ANOVA table Source SS df MS F p-value Regression 2.3916 1 2.3916 1.18 .3025 Residual 20.2376 10 2.0238 Total 22.6292 11 Regression output confidence interval variables coefficients std. error t (df=10) p-value 95% lower 95% upper std. coeff. Intercept 5.4259 0.000 Age (Years) -0.1276 0.1173 -1.087 .3025 -0.3890 0.1339 -0.325Related Questions
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