Question
Simsa Pty Ltd Company specialises in selling and advertising. The table below shows the pairs of amounts (in thousand Pula) realized from sales and spent
Simsa Pty Ltd Company specialises in selling and advertising. The table below shows the pairs of amounts (in thousand Pula) realized from sales and spent on advertising over a period of time.
Sales (Y) in P 1000 | Expenditure on adverts (X) P1000 |
20 | 5.5 |
22 | 6.0 |
25 | 10.2 |
30 | 9.9 |
28 | 8.4 |
32 | 12 |
35 | 11.2 |
40 | 15 |
45 | 16 |
(a). What are the assumptions of the simple linear regression analysis (3 marks) (b). Find the regression coefficient and hence the line of best fit (8 marks) (c). Predict the sales figure if the advertising expenditure is 20 (4 marks) (d). Calculate the correlation coefficient and comment on its value (3 marks) (e). Explain correlation coefficient and what it reflects? (2 marks)
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