Question: According to a flyer by a Prudential Insurance Company representative, the costs of approximate probate fees and taxes for selected net taxable estates are as follows:
a. Decide which variable should be the independent variable and which should be the dependent variable.
b. Draw a scatter plot of the data.
c. Does it appear from inspection that there is a relationship between the variables? Why or why not?
d. Calculate the least-squares line. Put the equation in the form of: y = a + bx.
e. Find the correlation coefficient. Is it significant?
f. Find the estimated total cost for a next taxable estate of $1,000,000. Find the cost for $2,500,000.
g. Does it appear that a line is the best way to fit the data? Why or why not?
h. Are there any outliers in the data?
i. Based on these results, what would be the probate fees and taxes for an estate that does not have any assets?
j. What is the slope of the least-squares (best-fit) line? Interpret the slope.