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Coefficient of Correlation and Determination

A sample of 12 homes sold in St.Paul, Minnesota, is selected. Can we conclude that as the size of the home (reported below in thousands of square feet) increases, the selling price (reported in $ thousands) also increases? Use the MegaStat Scatterplot function in Regression or the Excel Chart Wizard to create a scatter plot, and answer b) through d) below. Then, conduct a regression analysis and answer e), f), and g)

a.

Place scatter plot below, with a title:
(do not connect the dots, but show a "line of best fit")

b) Does the relationship appear to be a positive or a negative relationship?

c) The independent variable is:

d) The dependent variable is:
(which is dependent on the other?

Home Size (thousands of sq.ft) Selling Price($ thousands)
1.4 100
1.3 110
1.2 105
1.1 120
1.4 80
1.0 105
1.3 110
0.8 85
1.2 105
0.9 75
1.1 70
1.1 95

Use the Analysis ToolPak or Megastat to conduct a regression analysis,
and paste the output below:

e) Identify the coefficient of correlation
f) Identify the coefficient of determination
g) Can we conclude that there is a significant positive association
between the size of the home and the selling price? Use the .05
significance level.
Yes or No?
Why?

Solution Summary

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