Question

An insurance company wishes to examine the relationship between income (in $,000) and the amount of life insurance (in $,000) held by families. The company drew a simple random sample of families and obtained the following results:

Family - Income - Amount of Life Insurance
A - 40 - 110
B - 80 - 200
C - 110 - 220
D - 80 - 150
E - 80 - 170
F - 120 - 270
G - 60 - 140
H - 100 - 240
I - 60 - 150
J - 90 - 200

Question 1

What is the least squares estimate of the slope?

Question 2

What is the least squares estimate of the Y intercept?

Question 3

What is the prediction for the amount of life insurance for a family whose income is $85,000?

Question 4

What would be the residual (error) term for a family income of $90,000?

All answers should be to four decimal places.

Answer 1

1.9216
27.4254
163.3634
-0.3731