Please write clearly so I can understand. Thank you. 10 randomly selected quarte

Question

Please write clearly so I can understand. Thank you. 10 randomly selected quarters of prime rate and inflation rate data were randomly selected and gave the following: Average of X values= 11.20 Average of Y values = 7.59 SSx = 31.68 SST=SSy = 24.644 SSxy = 27.335 Find the regression model for forecasting purposes. Using the information from problem 8 What are SSerror and SSreg. Using information from problem 8, What arc Coefficient of Determination and Sample correlation coefficient (also interpret)

Explanation / Answer

Part (a)

Regression model is y = a + bx.

b = SSxy/SSx = 27.335/31.68 = 0.863;   a = Ybar – bXbar = 7.59 – (0.863 x 11.20) = - 2.076.

So, the regression model is: y = - 2,075 + 0.863x ANSWER

Part (b)

SSreg = (b2 x SSx) = (0.8632 x 31.68) = 23.594 ANSWER 2

SSerror = SSy – SSreg = 24,644 – 23.594 = 1.050 ANSWER 1

Part (c)

Sample correlation coefficient = r = SSxy/sqrt(SSx x SSy) = 27.335/sqrt(31.68 x 24.644)

= 0.9783 ANSWER 2

Coefficient of determination = r2 = 0.97832 = 0.9571 ANSWER 1

A coefficient of determination of 0.9571 is interpreted as ’95.71% of the variation in y (dependent variable) is explained by the regression model'. ANSWER 3

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---