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# Regression Analysis

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The following data have been collected by an accountant who is performing an audit of account balances for a major retail company. The population from which the data were collected represented those accounts for which the customer had indicated the balance was incorrect. The dependent variable, y, is the actual account balance as verified by the accountant. The independent variable, x, is the computer account balance.

y \$233 10 24 56 78 102 90 200 344 120 18
x \$245 12 22 56 90 103 85 190 320 120 23

a) Compute the least squares regression equation.
b) If the computer account balance was \$100, what would you expect to be the actual account balance as verified by the accountant?
c) Is the regression equation significant?
d) If " yes," at what level (s) of significance?
e) Write a statement that clearly states the relationship between the independent and the dependent variables. (if significant, be sure to state positive or negative; or direct or inverse, respectively - your choice.)

##### Solution Summary

The following data have been collected by an accountant who is performing an audit of account balances for a major retail company. The population from which the data were collected represented those accounts for which the customer had indicated the balance was incorrect. The dependent variable, y, is the actual account balance as verified by the accountant. The independent variable, x, is the computer account balance.

y \$233 10 24 56 78 102 90 200 344 120 18
x \$245 12 22 56 90 103 85 190 320 120 23

a) Compute the least squares regression equation.
b) If the computer account balance was \$100, what would you expect to be the actual account balance as verified by the accountant?
c) Is the regression equation significant?
d) If " yes," at what level (s) of significance?
e) Write a statement that clearly states the relationship between the independent and the dependent variables. (if significant, be sure to state positive or negative; or direct or inverse, respectively - your choice.)

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###### Education
• BSc , Wuhan Univ. China
• MA, Shandong Univ.
###### Recent Feedback
• "Your solution, looks excellent. I recognize things from previous chapters. I have seen the standard deviation formula you used to get 5.154. I do understand the Central Limit Theorem needs the sample size (n) to be greater than 30, we have 100. I do understand the sample mean(s) of the population will follow a normal distribution, and that CLT states the sample mean of population is the population (mean), we have 143.74. But when and WHY do we use the standard deviation formula where you got 5.154. WHEN & Why use standard deviation of the sample mean. I don't understand, why don't we simply use the "100" I understand that standard deviation is the square root of variance. I do understand that the variance is the square of the differences of each sample data value minus the mean. But somehow, why not use 100, why use standard deviation of sample mean? Please help explain."
• "excellent work"
• "Thank you so much for all of your help!!! I will be posting another assignment. Please let me know (once posted), if the credits I'm offering is enough or you ! Thanks again!"
• "Thank you"
• "Thank you very much for your valuable time and assistance!"

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