The following scatter plot shows the relationship between annual income and the amount of life insurance a family may take. Both variables are in thousands of dollars. Based on the scatter plot, do you believe there is a positive or negative linear relationship between the two variables? Do you expect the correlation coefficient to be close or +1 or -1? Explain fully. If you were to find the least square regression line for this data, do you feel this line would give a good prediction of insurance based on sales?
(Please see the attached file).
The solution creates a correlation coefficient and linear regression for a scatter plot. A complete, neat and step-by-step solution is provided in the attached file.