Homework Week 5 | Complete Solution

Homework Week 5

  A little statistics humor. Get it?
1. Describe the overall pattern of the relationship between hours spent telemarketing and number of new subscriptions.
    
2. What is the correlation between hours spent telemarketing and number of new subscriptions? [numerical answer required]    
3. What is the equation for the least squares regression line for the relationship between hours spent telemarketing and number of new subscriptions?
[Note: The OLI materials give the equation in the form Y = a + bx
But Excel presents the equation as Y = bx + a.
It doesn’t matter which way you express it as long as it’s correct and you can distinguish between the intercept and the slope.]     
4. If telemarketing hours increase by one hour, we would expect the number of new subscriptions to _________ by ____________.
    
5. Predict the number of subscriptions for a month in which there were 905 hours of telemarketing.    
6. Explain why it would not be a good idea to predict the number of subscriptions for a month in which there were 1600 hours of telemarketing.    
    
7. A researcher found that the relationship between the appraised value of a house (in thousands of dollars) and its age (in years) could be summarized by the regression equation:
Appraised value = 400.8 - 2.5 * age.
Interpret the value of the slope in the context of this study.
    

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The attached data file (Magazines.2015.xls) contains the hours per month spent telemarketing and the number of new subscriptions per month over a two-year period for a magazine publisher. The publisher would like to predict the number of new subscriptions based on the hours spent telemarketing.
Use the data to create a scatterplot; add a trendline; request the regression line equation and the r-squared value. (You do not have to submit the scatterplot but you will need it to answer Questions 1 – 6 below.)
HINT: Make sure the explanatory variable is on the x-axis.
8. An investor asks: How are stock prices influenced by interest rates?
Identify the explanatory and response variables.
    
9.  The graph below shows the relationship between average daily temperature and the amount of ice cream sales at an ice cream stand.
Based on the graph, what is the best prediction for the amount of ice cream sales on a day when the average temperature is 200C?

10. In New York State there is a fairly strong positive correlation between principals’ salaries and the reading scores of their students. (This is true.) Upon learning this, a politician recommends that principals’ salaries be increased because this will cause students’ reading scores to increase. Good idea? (Use your knowledge of statistics to explain your answer.)