Answer to Question #158384 in Statistics and Probability for Abdul Ahad

Question

A fast-food chain decided to carry out an experiment to assess the influence of advertising expenditure on sales. Different relative changes in advertising expenditure, compared to the previous year, were made in eight regions of the country, and resulting changes in sales levels were observed the accompanying table shows the results.

Increase in advertising expenditure (%) 0 5 15 20 25 30 35 40
Increase in sales (%) 5 10 18 25 35 50 60 65

a. Determine the value of ∑X, ∑X2, ∑Y, ∑Y2, ∑XY. Where X represent independent variable and Y for dependent variable.
b. Determine and interpret the coefficient of correlation between the two variables.
c. Determine the value of regressions coefficients and write down the simple linear regression model.
d. Test the validity of the model with the help of ANOVA.
e. Determine the tabulated values of “f” distribution at 0.1 level of significance.
f. What does “R square” measure? What is its value and interpret it?

Answer 1

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