Amazon.com has become one of the most successful online merchants. Two measures of its success are sales and net income/loss figures. The data can be found in the file Amazon.
a. Produce a scatter plot for Amazon’s net income/ loss and sales figures for the period 1995 to 2011. Determine the order (or degree) of the polynomial that could be used to predict Amazon’s net income/ loss using sales figures for the period 1995 to 2011.
b. To simplify the analysis, consider only the values from 1995 - 2004. Produce the polynomial indicated by this data.
c. Test to determine whether the overall model from part b is statistically significant. Use a significance level of 0.10.
d. Conduct a hypothesis test to determine if curvature exists in the model that predicts Amazon’s net income/ loss using sales figures from part b. Use a significance level of 0.02 and the test statistic approach.