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Exercise 1:
Since sales (y variable) tends to increase as the Advertising Expense (x variable) increases, we
can say that there is a positive correlation between the variables.
b. Find the least square regression equation.
b = N(Σxy) – (Σx)(Σy)
N (Σx2) − (Σx)2
b = 12 (372.16) – (16.4) (258.6)
12 (25.72) – 268.96
b = 4,465.92 – 4,241.04
308.64 – 268.96
b = 224.88
39.68
b = 5.67
Y= a + bx
Y= 13.80 + 5.67x
Y= 13.80 + 5.67 (3.7)
Y= 13.80 + 20.98
Y= 34.779 ≈ 34.78