Diamond. A diamond is always sold based on its certification and quality which is based on its color, clarity, cut, and carat. The following shows the diamond carat weight and its price per carat for a sample of diamonds with a round brilliant cut:

a) Working with the data set with the same name as this exercise, find a regression model showing the relationship between diamond carat weight (the predictor variable) and its price (the response variable).

b) Explain the meaning of the 95% prediction intervals in this context.

c) Explain the meaning of the 95% confidence intervals in this context.

Transcribed Image Text:

20000 18000 16000 14000 12000 10000 Price (Per Carat, Round Brilliant Cut) 8000 6000 4000 Diamond Price and Carat Weight Plot ***************** y 12568x+1416.6 R=0.8084 2000 0- + + 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 Diamond Carat Weight