2. Baldur is a big fan of salaries. He collects data on wages and the length of schooling thepeople had from 100 employees in a large company with the aim of creating a model thatcan predict wages by level of education (measured in the number of years in school afterprimary school). The employees with the lowest level of education in Baldur's dataimmediately entered the labor market after compulsory school leaving, while those with thehighest level of education have completed 9 years of schooling after leaving compulsoryschool leaving. Baldur started by drawing the data and saw that the relationship is linear. Healso calculated some fish sizes that can be seen below:standardChangeaveragedeviationsalary660020150100Education (year from primary school diploma)5.52.2He also calculated the correlation coefficient between salary and level of education(measured in the number of years in school from primary school exam) and obtained r =0.55.a.) Find the equation regression line of the least squares for Baldur's model.b.) What is the explanatory power of the model and what does it tell us?c.) How much does the salary of the company's employees increase for each year inschool in excess of the primary school diploma according to the model?d.) Georg has completed 5 university degrees and spent a full 17 years in school afterprimary school. Use the model to predict Georg's salary. Is the forecast reliable?Justify.e.) Gunnar wants to investigate with the appropriate hypothesis whether thecorrelation coefficient is different from zero. What is the value of the test size thatGunnar should use?

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2. Baldur is a big fan of salaries. He collects data on wages and the length of schooling the people had from 100 employees in a large company with the aim of creating a model that can predict wages by level of education (measured in the number of years in school after primary school). The employees with the lowest level of education in Baldur's data immediately entered the labor market after compulsory school leaving, while those with the highest level of education have completed 9 years of schooling after leaving compulsory school leaving. Baldur started by drawing the data and saw that the relationship is linear. He also calculated some fish sizes that can be seen below:

2. Baldur is a big fan of salaries. He collects data on wages and the length of schooling the people had from 100 employees in a large company with the aim of creating a model that can predict wages by level of education (measured in the number of years in school after primary school). The employees with the lowest level of education in Baldur's data immediately entered the labor market after compulsory school leaving, while those with the highest level of education have completed 9 years of schooling after leaving compulsory school leaving. Baldur started by drawing the data and saw that the relationship is linear. He also calculated some fish sizes that can be seen below:

Linear Algebra: A Modern Introduction

4th Edition

ISBN:9781285463247

Author:David Poole

Publisher:David Poole

Chapter7: Distance And Approximation

Section7.3: Least Squares Approximation

Problem 31EQ

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