Question

A publisher of college textbooks conducted a study to relate profit per text y to cost of sales x over a 6-year period when its sales force (and sales costs) were growing rapidly.  These inflation-adjusted data (in thousands of dollars) were collected:

x  = {5.0, 5.6, 6.1, 6.8, 7.4, 8.6}                y = {16.5, 22.4, 24.9, 28.8, 31.5, 35.8}

1. It is a multiple choice question.

The regression model is..

A. E(y) + ε

B. y= B0+ B1x

C. y= B0 + B1x + ε

D. None of these

2. Interpet r ²

^3. Construct a 95% CI for Beta one

Answer 1

	X	Y	X * Y
	5	16.5	82.5	25	272.25
	5.6	22.4	125.44	31.36	501.76
	6.1	24.9	151.89	37.21	620.01
	6.8	28.8	195.84	46.24	829.44
	7.4	31.5	233.1	54.76	992.25
	8.6	35.8	307.88	73.96	1281.64
Total	39.5	159.9	1096.65	268.53	4497.35

Equation of regression line is


b = 5.1806

a =( 159.9 - ( 5.1806 * 39.5 ) ) / 6
a = -7.4559
Equation of regression line becomes

Part 1)  

The regression model is   y= B0 + B1x + ε

Part 2)

Part 3)

	X	Y	Sxx	Syy	Sxy
	5	16.5	2.506839	103.0225	16.0705	25
	5.6	22.4	0.966879	18.0625	4.179025	31.36
	6.1	24.9	0.233579	3.0625	0.845775	37.21
	6.8	28.8	0.046959	4.6225	0.465905	46.24
	7.4	31.5	0.666999	23.5225	3.960995	54.76
	8.6	35.8	4.067079	83.7225	18.45281	73.96
Total	39.5	159.9	8.488333	236.015	43.975	268.53

Confidence Interval



95% confidence interval is