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ABC Insurance Company wants to study the relationship between the amount of fire damage and the distance between the burning house and the nearest fire
ABC Insurance Company wants to study the relationship between the amount of fire damage and the distance between the burning house and the nearest fire station. The information will be used in setting rates for insurance coverage. For a sample of 30 claims for the last year, the director of the actuarial department determined the distance from the fire station(x) and the amount of fire damage, in thousands of dollars (y). The computer output is as follows: Anova Table Source SS df MS F Regression 1, 864.5782 1 1, 864.5782 38.83 Residual 1,344.4934 28 48.0176 Total 3, 209.0716 29 Regression output Variables Coefficients Std. Error t(df = 28) Intercept 12.3601 3.2915 3.755 Distance - X 4.7956 0.7696 6.231 1. Write out the regression equation. 2. How much damage would you estimate for a fire 5 km from the nearest fire station. 3. Determine the coefficient of determination. 4. Determine the coefficient of correlation. 5. Conduct a test of hypothesis to determine if there is a significant relationship between the distance from the fire station and the amount of damage. (Use the 0.01 significance level and a two tailed test)
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