A small business owner wants to know if the she can predict weekly salės based on the amount of money she spends on advertising. She already has the data in her excel spread sheet and quickly computes the regression equation to be y = 5x + 32 R?= 0.63 a. According to the equation, how much money should she spend on advertising to have sales of 50,000? b. What does the slope mean in terms of the situation? c. What does the y-intercept mean in terms of the situation? d. What does the coefficient of determine mean in terms of the situation?
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.
Define both x and y in all problems. x is the cause, and y is the effect. This is the most important step when doing linear regression, otherwise, all the remanding parts will be wrong.
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