Posted: September 16th, 2017

COMM 291 ASSIGNMENT 2 – Application of Statistics in Business (Fall 2014) Problem

Question – Association, Correlation and Simple Linear Regression

a) State whether the following statement is true or false. Explain your answer.

i. The correlation of -0.78 shows that there is almost no association between a

country’s GDP and Infant Mortality Rate.

ii. The correlation of -0.78 between GDP and Infant Mortality Rate implies that the

correlation between Infant Mortality Rates and GDP is 0.78.

iii. The correlation between GDP and Country is 0.44, showing a positive linear

relationship between the two variables.

iv. A very high correlation (r = 1.5) is observed between a country’s per capita GDP

and Living Standard Index.

b) Data on fuel consumption (y) of a car at various speeds (x) were collected. Fuel

consumption is measured in litres of gasoline and speed is measured in kilometers per

hour. A simple linear regression was fitted to the data; the residuals of the model were

computed and appear in the table below.

Residuals

10.09 2.24 -0.62 -2.47 -3.33 -4.28 -3.73 -2.94

-2.17 -1.32 -0.42 0.57 1.64 2.76 3.97

Speed (x) in km/hr

65 70 75 80 85 90 95 100

105 110 115 120 125 130 135

i. Make a scatterplot of the residuals versus speed. Describe the scatterplot.

ii. Compute the mean of the residuals. Explain why you get this result.

iii. Would you use the estimated linear regression line to predict fuel consumption

based on speed? Explain your answer.

Tutorials for this Question

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