Misinterpretations. An advertising agent who created a regression model using amount spent on Advertising to predict annual

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Misinterpretations. An advertising agent who created a regression model using amount spent on Advertising to predict annual Sales for a company made these two statements.

Assuming the calculations were done correctly, explain what is wrong with each interpretation.

a) My of 93% shows that this linear model is appropriate.

b) If this company spends $1.5 million on advertising, then annual sales will be $10 million.

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Business Statistics

ISBN: 9780321716095

2nd Edition

Authors: Norean D. Sharpe, Paul F. Velleman, David Bock, Norean Radke Sharpe

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