MTH3003

SESSION 2020/2021 SEM 2

TUTORIAL 10

1. The following information is obtained from a sample data set:

𝑛 = 10 ∑ 𝑥 = 100 ∑ 𝑦 = 220 ∑ 𝑥𝑦 = 3680 ∑ 𝑥 = 1140
Find the estimated regression line.

2. Data on driving experience (in years) and the monthly auto insurance premium (in Ringgit
Malaysia) paid by 8 drivers insured with the same insurance company and having the same
insurance policies were summarized as follow:

∑ 𝑥 = 90 ∑ 𝑦 = 474 ∑ 𝑥𝑦 = 4793
𝑆 = 383.500 𝑆 =1557.500 𝑆 = −593.500

(a) Find the equation for the regression line with the driving experience as the
independent variable and monthly insurance premium as the dependent variable.
(b) Predict the monthly insurance premium for a driver with 10 years of driving
experience.
(c) Compute MSE.
(d) Test the hypothesis whether 𝛽 is negative at 5% significance level.
(e) Construct a 90% confidence interval for the slope, 𝛽.

3. The following data give information on the ages (in years) and the number of breakdowns
during the past month for a sample of seven machines at a large company.

Age (year) Number of breakdowns

12 10
7 5
2 1
8 4
13 12
9 7
4 2
 (a) Construct a scatter diagram for this data. Does the scatter diagram exhibit a linear
relationship between age of machine and number of breakdown?
(b) With age of machine as an independent variable and number of breakdowns as a
dependent variable, compute 𝑆 , 𝑆 and 𝑆
(c) Find the least square regression line.
(d) Compute 𝑟 and 𝑟 and briefly explain what they mean.
(e) Compute MSE.
(f) Construct a 99% confidence interval for the slope 𝛽.
(g) Test at the 2.5% significance level whether 𝛽 is positive.
(h) At the 2.5% significance level, can you conclude that the correlation coefficient is
positive?

4. A managerial team of a store that sells television sets wants to know whether their
advertising is increasing their sales or not. Let Y be the number of TV sold in a given month,
and let X be the amount of money spent on advertising in a given month in thousands of
Ringgit Malaysia. Result on the regression of advertising expenditures and sales for 42
months are summarized below in ANOVA table along with the regression line equation.

𝒚 = 𝟒𝟖. 𝟒 + 𝟏𝟎. 𝟐 𝒙

Source DF SS MS F

Regression 1 571411 571411 384.70

Error 40 59413 1485

Total 41 630824

(a) Briefly explain the meaning of the values of 𝑎 and 𝑏 of regression equation above.
(b) Is there a significant linear relationship between sales, Y and advertising, X? Justify
your answer by performing hypothesis testing on parameter 𝛽at 0.01 significance
levels and state your conclusion.
(c) What percentage of variability in television sales is explained by advertising
expenditures?
5. A study is designed to check the relationship between smoking and longevity. A sample of 15
men aged 50 years and older was taken and the average number of cigarettes smoked per
day and the age at death was recorded, as summarized in the table below.

Cigarettes 5 23 25 48 17 8 4 26 11 19 14 35 29 4 23

Longevity 80 78 60 53 85 84 73 79 81 75 68 72 58 92 65

(a) Find the regression equation of longevity and smoking.

(b) Determine whether there is significant linear relationship between smoking and
longevity. Test at the 5% level of significance.
(c) Construct a 95% confidence interval for 𝛽.
(d) Calculate coefficient of determination and interpret it.
(e) Using the 5% significance level, can you conclude that the linear correlation
coefficient is different from zero?
(f) What is the estimated value of longevity for men who smoked 20 cigarettes per day?
(g) Construct a 95% confidence interval for the mean longevity for men who smoke 20
cigarettes per day.
(h) Construct a 95% prediction interval for the longevity of randomly selected men who
smoke 20 cigarettes per day.