Solution :

Given that,

n = 400

x = 80

Point estimate = sample proportion =   = x / n = 80 / 400 = 0.2

1 -   = 1 - 0.2 = 0.8

At 95% confidence level

 = 1 - 95%

 =1 - 0.95 =0.05

/2 = 0.025

Z /2 = Z0.025 = 1.96

a. Margin of error = E = Z  / 2 *   ((  * (1 -   )) / n)

= 1.96 ( (0.2 * (0.8) / 400)

= 0.0392

A 95% confidence interval for population proportion p is ,

 - E < p <   + E

0.2 - 0.0392 < p < 0.2 + 0.0392

0.1608 < p < 0.2392

( 0.1608 , 0.2392 )

The 95% confidence interval for the population proportion p is ( 0.1608 , 0.2392 )
b. Margin of error = E = 0.04

Sample size = n = (Z  / 2 / E )2 *   * (1 -   )

= (1.96 / 0.04)2 * 0.2 * 0.8

= 384.16

Sample size = n = 384

Quess 2
Here the explanatory variable is total wealth (in dollars) and age (in years) is the response variable.

a.

The regression equation will be of the form,

y=β0+β1x+e  ,
Now, we have to estimate the coefficients of the equation using least square method.

Applying least square method,

β1=covx,ySx2 and β0=y-β1x

X=1ni=1nxi, Y=1ni=1nyi
Now, we have the estimated values as,

45.2159
β0

5.3265
β1
The estimated regression equation is,

(Total wealth) y = 45.2159+5.3265 x (Age)

b.

Now, we have to estimate the total wealth when a person is 50 years old. We replace x=50

Then, the estimated wealth =311.5409 dollars.

c.

The coefficient of determination is given by,

r2=SxySxxSyy

Sxx=1n-1i(xi-x)2  =sample variance of x

Syy=1n-1i(yi-y)2  = sample variance of y

covx,y=1nixiyi-xy  = population covariance b/w x and y.

Sxy=1n-1ixiyi-xy  =sample covariance b/w x and y

The value of the coefficient of determination =0.9146

Interpretation:
          91.46% of the total variability is explained by the estimated regression model.

d.

          Now, we want to test whether there is a significant relationship between wealth and age at the
10% significance level.

Hypothesis to be tested:
          We want to test,

i)H01:the model with no independent variables fits the data

H11:not H01

ii)H02:β0=0 ag. H12:β0≠0

iii)H03:β1=0 ag. H13:β1≠0
Test Statistics:

i)The test statistic for testing H01  ag. H11  is given by,

F=MS due to regressionMS due to residual  follows Fα;1.6

ii) The test statistic for testing H02  ag. H12  is given by,

The appropriate test statistic for testing H02  is, t1=β0-β0SE(β0) follows t distribution with

degrees of freedom, under the null hypothesis H02  .

iii)The test statistic for testing H03  ag. H13  is given by,

The appropriate test statistic for testing H03  is, t2=β1-β1SE(β1)  follows t

distribution with degrees of freedom, under the null hypothesis H03  .

Calculations:

F=51907.64840.3936=61.7658

t1=45.215939.8049=1.1359
t2=5.32650.6777=7.8596
Critical values:

We take α=0.05.
Then F0.05;1.6=5.9873

t0.05;6=1.9432
Here to calculate the critical value we use Excel .Inv() function.

Conclusion:
Here, the value of F statistic is greater than the critical value, hence we reject the null hypothesis
and conclude on the basis of the given data that the model fits the data moderately.

And, |t1|  < t-critical and |t2|  >t-critical.

Hence, we accept that, β0=0 and β1 is not equal to zero

 . i.e. the age has significant effect in

predicting the wealth but the intercept has no significant effect in predicting the wealth.

Ques 3

Step 2
1).

From the given output, the estimated regression equation is

The percentage of variation explained in the response variable by the

independent variables is 94.6%.
Step 3
3).

The hypotheses for the test are given as follows:

Null hypothesis:

All the regression coefficients are significantly equal to zero.

Alternative hypothesis:

Not all the regression coefficients are significantly equal to zero.

The level of significance is 0.05.

The F-statistic is calcula...

Ques 3

Step 1
c.

From the given information,

The dependent variable is: family spending(y)

The independent variables are:

 Income(x1)
 family size(x2)
 additions to savings(x3)

Step 2
The complete ANOVA table is,
 

ANOVA df SS MS F
45.9634/3
15.32113/0.238345
Regressio
3 45.9634
n =15.3211
=64.28121
3
2.6218/11
Residual 11 2.6218  
=0.23834
5
Total 3+11=14 45.9634+2.6218=48.5852    

Null and Alternative Hypotheses are given below:

Ho : The variable y is not significantly related with the independent variables.

Ha : The variable y is significantly related with the independent variables.

Decision Rule:

If p-value ≤ α, then reject the null hypothesis.

If p-value > α, then do not reject the null hypothesis.

p-value:

From the ANOVA table, the F value is 64.28121.

The p-value corresponding with test statistic 64.28121, numerator degrees of
freedom 3 and the denominator degrees of freedom 11 is 0.0000 and
obtained by the Excel function, “=F.DIST...