Please show step by step work: Assume that there is a positive linear correlation between the variable R (return rate in percent of a financial investment) and the variable t (age in years of the investment) given by the regression equation R = 2.3t + 5.5. a) Without further information, can we assume there is a cause and effect relationship between the return rate and the age of the investment? b)If the investment continues to grow at a constant rate, what is the expected return rate when the investment is 7 years old? c)If the investment continues to grow at a constant rate, how old is the investment when the return rate is 33.1%?
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.
Please show step by step work:
Assume that there is a
a) Without further information, can we assume there is a cause and effect relationship between the return rate and the age of the investment?
b)If the investment continues to grow at a constant rate, what is the expected return rate when the investment is 7 years old?
c)If the investment continues to grow at a constant rate, how old is the investment when the return rate is 33.1%?
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