Question

1. A random sample of eight auto drivers insured with a company and having similar auto insurance policies was selected. The following table lists their driving experience (in years) and the monthly auto insurance premium (in dollars).

Driving Experience
5
2
12
9
15
6
25
16

Monthly Auto Insurance Premium ($)
64
87
50
71
44
56
42
60

a) Find the regression of Monthly Auto Insurance Premium on Driving Experience and write down the least squares regression model.

b) Give a brief interpretation of the value of the slope calculated in part a.

c) Is the slope significant? Explain.

d) Predict the Monthly Auto Insurance Premium for a driver with 10 years of driving experience.

e) Calculate the correlation coefficient and interpret its meaning.

f) Is the linear correlation coefficient between both variables significant? Explain.

g) Calculate the coefficient of determination and explain its meaning.

h) Draw a scatter diagram of the two variables and show the regression model obtained in part a.

Answer 1