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hw4_sol

# hw4_sol - Statistics 528 – Homework 4 Solutions 2.40(a...

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Statistics 528 – Homework 4 Solutions 2.40 (a) 2000 1000 0 200 100 0 Nitrates Absorbance Minitab gives the correlation 1.0 (in fact, .99994). Note that it is rounded up. So, recalibration would not be necessary. (b) The equation of the least squares line is Absorbance = 1.66 + 0.113 Nitrates. At 500mg of nitrates per liter, the predicted absorbance is 58.16(=1.66 + 0.113*500). Because the correlation is very close to 1, we expect that the prediction would be very accurate. 2.46 (a) Plot below. (b) Correlation is 0.503. R-square is 0.253. The correlation 0.503 suggests that there is a positive linear association between U.S. returns and overseas returns. However, the strength of the linear relation is not high enough to predict overseas returns accurately based on U.S. returns. The R-square 0.253 indicates that only 25.3% of variation in overseas returns can be explained by linear regression on U.S. returns. (c) Oversea = 4.76 + 0.663 US. For 1993, the predicted value is 11.46(=4.76+0.663*10.1), and the actual value is 32.9. (d) Predictions will not be very accurate because the correlation is low.

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40 30 20 10 0 -10 -20 -30 70 60 50 40 30 20 10 0 -10 -20 US
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hw4_sol - Statistics 528 – Homework 4 Solutions 2.40(a...

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