Course: STAT-212

Term: 182
Homework # 4
Material: Chapter 13
Due Date: Sunday, 17-March-2019

Q1: The owner of Maumee Ford-Volvo 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 the dealership
during the last year.

Car Age Selling Price Car Age Selling Price

(years) ($000) (years) ($000)
1 9 8.1 7 8 7.6
2 7 6 8 11 8
3 11 3.6 9 10 8
4 12 4 10 12 6
5 8 5 11 6 8.6
6 7 10 12 6 8

a) Draw a scatter diagram.

b) Determine the correlation coefficient.
c) Interpret the correlation coefficient. Does it surprise you that the correlation coefficient
is negative?
d) Is it reasonable to conclude that there is negative association in the population between
the two variables? Use the .01 significance level.

Q2: A highway employee performed a regression analysis of the relationship between the
number of construction work-zone fatalities and the number of unemployed people in a state.
The regression equation is Fatalities = 12.7 + 0.000114 (Unemp). Some additional output is:

Analysis of Variance

Source DF Adj SS Adj MS F-Value P-Value

Regression 1 10354 10354 15.46 0.001
Error 18 12054 670
Total 19 22408

Coefficients

Term Coef SE Coef T-Value P-Value

Constant 12.726 8.115 1.57 0.134
Unemp 0.00011386 0.000002896 3.93 0.001

a) How many states were in the sample?

b) Determine the standard error of estimate.
c) Determine the coefficient of determination.
d) Determine the correlation coefficient.
e) At the .05 significance level, does the evidence suggest there is a positive association
between fatalities and the number unemployed?
Q3: Mr. James McWhinney, president of Daniel-James Financial Services, believes there is a
relationship between the number of client contacts and the dollar amount of sales. To document
this assertion, Mr. McWhinney gathered the following sample information. The x column
indicates the number of client contacts last month and the y column shows the value of sales
($ thousands) last month for each client sampled.

Number of Sales Number of Sales

Contacts, ($thousands), Contacts, ($thousands),
x y x y
14 24 23 30
12 14 48 90
20 28 50 85
16 30 55 120
46 80 50 110

a) Determine the regression equation.

b) Determine the estimated sales if 40 contacts are made.
c) Using Durbin-Watson test, check for the presence of positive auto-correlation. Use the
.05 significance level.
d) Can we conclude that number of contacts affect the sales positively? Use the .05
significance level.
e) Determine the .95 confidence interval, in thousands of dollars, for the mean of all sales
personnel who make 40 contacts.
f) Determine the .95 prediction interval, in thousands of dollars, for a particular
salesperson who makes 40 contacts.