HW2 - would be a high correlation between these two funds....

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Rory Wade Stat3022 Homework #2 2/4/10 [2.10] Variable 1: income of parents Variable 2: amount of money borrowed The Explanatory variable in this example would be the income of the student’s parents. The Response variable would be the amount of money barrowed. Both of these variables are quantitative since they refer to amounts. One would expect a negative association between these variables because the more a student’s parents make, the less money would typically be borrowed for school. The opposite is also assumed that if a parent’s income is lower, the student will likely borrow more money. [2.48] Since correlation only describes the strength in which variables are connected, the underlying outcome can still change by great amounts. If the outcome in an investment in Fund A is always twice as that of Fund B then there
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Unformatted text preview: would be a high correlation between these two funds. However the coefficient of variation (showing the amount of risk) is significant when considering correlation. Fund A would always move in the same direction as Fund B and shift directions at the exact same time, but has significantly more risk and therefore moves twice as fast as Fund B. [2.64] A) Since .00086 is the change in the proportion eaten for every change in the number of perch (slope of regression), if 10 perch are added then the proportion eaten goes up Proportion eaten = (0.0086 x 10) = 0.086 B) This prediction is nonsense because if there are no perch in the pen then there cannot be any perch eaten. Making the proportion eaten to be zero. [2.78]...
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HW2 - would be a high correlation between these two funds....

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