Problem 1: An Insurance company wishes to examine the relationship between annual Income and the amount of life Insurance held by heads of families. The company takes a simple random sample of 10 family heads and obtains the following results (in $1,000's). Family 1 2 3 4 5 6 7 8 9 10 Income $35 $38 539 $38 $40 $53 $36 $45 $31 $32 Insurance $72 $90 594 $80 $82 $110 $86 597 $70 $74 1. a. Identify the response variable: b. Identify the explanatory variable: One Income Insurance Variable Summary Data Set #1 Data Set #1 Mean $38.70 $85.50 Varlance $41.34 $158.05 Minimum $31.00 $70.00 Maximum $53.00 $110.00 Count 10 10 2. What observations do you make about the relationship between amount of Life Insurance purchased and Income base on the following scatterplot? 120 Scatterplot of Insurance vs Income Insurance 110 100 90 80 70 60 30 35 40 45 50 55 Income 3. Does knowing that the correlation coefficient for amount of Life Insurance and Income is 0.9161 cause you to modify your observations in the prior question? 4. Explain what is meant by "Least Squares".