Here are plots of Respond Amount against the three predictors, a plot of the residuals against the predicted values from the multiple regression, a histogram of the residuals, and a Normal probability plot of the residuals. Recall that the data come from a random sample of customers who both responded to the catalogue and purchased at least three times in the past five years.

QUESTION:

 Do the assumptions and conditions for multiple regression appear to have been met?

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250 150 50 20.000 40,000 60,000 80,000 Income 250 150 50 30 30 Frequency 25 25 20 250 150 50 200 400 600 800 1000 Total Amount Spent 40 20 + + 3 4 5 6 7 8 9 10 50 100 150 200 250 15 15 10 5 Number of Purchases Residuals 40 20- -20 20 -40 Predicted Values 0 -60-40-20 0 20 40 60 6- + + -2 -1 0 1 2