Tallis is a graduate student at Purdue. Each school day he commutes one hour to

Question

Tallis is a graduate student at Purdue. Each school day he commutes one hour to school and back. In preparation for his commute, he considered a new insurance policy on his car. The insurance company provided him a dataset on the price of the insurance (controlling for inflation) in U.S. dollars vs. length of time without incident. He then calculated the following prediction line) = 776.8 11-46273x. The corresponding coefficient of determination is 0.9135. Answer the questions on the next page. 8. The data and scatterplot are below: Time without incident (in years)1.5 2 25 3 3.75 4.5 6 8 Policy Price (in dollars) 800700 645 642 622 600 550 530 410 Price of Insurance (US Dollars) vs. Length of Time without Incident (Years) Length of Time without Incident in Years

Explanation / Answer

(A) From the scatter plot we can observe that the relationship between the two variables is linear.

(B) The value of the slope is -46.27. It specifcally tells that as length of the time increases the price also decreases.

(C) The correlation between the two is -0.955784 which indicates strong negative correlation

(D) Predicted price when there are 3 years without incident = 638

Predicted price when there are 10 years without incident = 314.11

The assumption may not be true since it can yield negative price

(E) Predicted value is 707.405 and observed is 700 thus residual -7.405

(F) Percentage of variance not explained by the linear relationship bewtween the variables

= 1- R^2 = 8.65%

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.