ECON 2A03 Study Guide - Final Guide: Pearson Education, Summary Statistics, Standard Deviation
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16,945: comment on whether each of the following conditions for correlation / linear regression is met, quantitative variables condition, linearity condition, outlier condition. Answer: yes, both variables are quantitative, yes, the relationship appears to be straight enough, yes, no obvious outliers. Answer: 0. 409, cash bonus = -16,945 + 0. 409 annual pay. Answer: r2 = 0. 54 = 54%, which means that 54% of the variation of the cash bonus can be explained by variation in the annual pay. Answer: ,855, not very, since we are predicting for a value of annual pay beyond the range of the data. We should be careful about extrapolating beyond the range of the predictor variable. It tells us that the actual cash bonus was ,981 less than the model predicted. Copyright 2018 pearson canada, inc: below is a plot showing residuals versus fitted values for the estimated regression equation relating cash bonus to annual pay for the account executives at johnson financial group.
