Observations 8 ANOVA df SS MS F Significance F Regression 1 51907.64 51907.64 Residual 6 5042.361 840.3936 Total 7 56950 Coefficients Standard Error t Stat P-value Intercept 45.2159 39.8049 Age 5.3265 0.6777 a. State the estimated regression line and interpret the slope coefficient. b. What is the estimated total personal wealth when a person is 50 years old? c. What is the value of the coefficient of determination? Interpret it. d. Test whether there is a significant relationship between wealth and age at the 10% significance level. Perform the test using the following six steps. Step 1. Statement of the hypotheses Step 2. Standardized test statistic Step 3. Level of significance Step 4. Decision Rule Step 5. Calculation of test statistic Step 6. Conclusion
Correlation
Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.
Linear Correlation
A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.
Regression Analysis
Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.
Observations 8
ANOVA
df SS MS F Significance F
Regression 1 51907.64 51907.64
Residual 6 5042.361 840.3936
Total 7 56950
Coefficients Standard Error t Stat P-value
Intercept 45.2159 39.8049
Age 5.3265 0.6777
a. State the estimated regression line and interpret the slope coefficient.
b. What is the estimated total personal wealth when a person is 50 years old?
c. What is the value of the coefficient of determination? Interpret it.
d. Test whether there is a significant relationship between wealth and age at the 10%
significance level. Perform the test using the following six steps.
Step 1. Statement of the hypotheses
Step 2. Standardized test statistic
Step 3. Level of significance
Step 4. Decision Rule
Step 5. Calculation of test statistic
Step 6. Conclusion
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