A random sample of ten drivers insured with a company and having similar auto insurance policies

was selected. The following table lists their driving experience (in years) and monthly auto

insurance premium.

Driving Experience (Years)

3

5

2

10

8

15

6

20

16

1

Monthly Insurance Premium ($)

72

65

75

45

50

30

60

20

27

80

(a) Draw a scatter diagram for the above data.

(b) Write down the suitable regression model with necessary assumptions.

(c) Find the estimated least squares regression line. Interpret the estimated slope value.

(d) Calculate the coefficient of correlation for the above data and comment on this value.

(e) Test at the 1% significance level whether the slope of the regression line is negative.