Regression Diagnostics and Pitfalls The scatterplot below shows fabricated data

Question

Regression Diagnostics and Pitfalls The scatterplot below shows fabricated data for the price per share versus earnings per share per year of 100 public corporations. The average earnings per share is $9.75 per year with an SD of $5.98 per year, and the average price per share is $69.23 with an SD of $34.81. The correlation between price and eamings is 0.905. (Use this figure in your calculations, not the value of the correlation coefficient in the applet.) Faux Price per share vs. Earnings Data 140 100 90 60 40 20- 10 12 14 16 18 r: 0.91 Regression Line Plot Residuals x = 8.45 y 4.69 Problem 11 Consider a group of real estate agents, and the value of the real estate sold by each agent in each of two consecutive fiscal quarters. Suppose that there is a positive association between the amounts sold in the two quarters, and that across agents, the mean and standard deviation of sales is about the same in the two quarters. Because of the regression effect, the agent with the lowest sales volume in the present quarter will tend to have highe sales volume in the next quarter. (Q16)P A Talse B: truc

Explanation / Answer

It says that there is positive correlation between the variables which means increase in one will increase the value of other variable

Hence answer is False.

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