Calculate the Pearson correlation coefficient between the two variables, to two decimal places. Comment of the strength of the relationship revenue and expenditure. Find the equation of the the least-squares regression line, assuming sales revenue is the dependent variable (Y) and expenditure is the independent variable (X) to 2 d.p.
The following table shows the annual sales revenue of 12 firms and their expenditure on the market research.
Sales revenue (£ 000) Expenditure on market research (£ 000)
24 1.2
20 0.8
18 1.1
14 0.8
19 0.9
13 0.5
25 1.3
26 1.5
30 1.4
34 1.6
24 1.2
20 0.8
- Calculate the Pearson
correlation coefficient between the two variables, to two decimal places. - Comment of the strength of the relationship revenue and expenditure.
- Find the equation of the the least-squares regression line, assuming sales revenue is the dependent variable (Y) and expenditure is the independent variable (X) to 2 d.p.
- Use your estimated regression equation in 22 to predict sales revenue if expenditure on market research is: £700.
- Use your estimated regression equation in 22 to predict sales revenue if expenditure on market research is: £2,000.
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