Refer to Exercise 3.70 where we looked at the relationship between the grade of a particular coin (Canadian 1925 nickel) and its auction selling price.

a. Is there sufficient evidence to conclude that the two variables are linearly related?

b. Compute the coefficient of determination and briefly explain what it tells you.

In exercise 3.70

Coin collecting is big business around the world. As an illustration, there are more than 500,000 American coins and more than 100,000 Canadian coins for sale/auction on Ebay. Moreover, there are dozens of other coin auctions every month. There are three critical factors that determine the value of a coin. They are rarity, condition, and demand. Condition is now measured on a 70-point scale where 0 is very poor and 70 is perfect. To determine how condition affects price a random sample of auction sales of a 1925 Canadian nickel (a relatively rare coin) was drawn. The auction price ($Canadian), including buyer’s premium and the condition were recorded over the past 3 years. a. Draw a scatter diagram b. What does the graph tell you about condition and price?