Q1. The general manager of a telemarketing company believes that experience is the most important factor in determining the level of success of a telemarketer. To examine this belief she records last month’s sales (in $1,000s) and the years of experience of 10 randomly selected telemarketers. These data are listed below.
Telemarketer Years of Experience Sales
1 0 7
2 2 9
3 10 20
4 3 15
5 8 18
6 5 14
7 12 20
8 7 17
9 20 30
10 15 25
1. Use the regression equation to determine the predicted values of y .
2. Use the predicted and actual values of y to calculate the residuals.
3. Plot the residuals against the predicted values of y . What does the graph tell you?
4. Compute the standardized residuals.
5. Identify possible outliers.
Q2. A professor of economics wants to study the relationship between income (y in $1000s) and education ( x in years). A random sample eight individuals is taken and the results are shown below.
Education 16 11 15 8 12 10 13 14
Income 58 40 55 35 43 41 52 49
– Find the regression line and interpret the value of the slope of the regression line.