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Problem:
The price of diamond rings. A newspaper advertisement in the Straits Times of Singapore contained pictures of diamond rings and listed their prices, diamond weight (in carats), and gold purity. Based on data for only the 20-carat gold ladies' rings in the advertisement, the least-squares regression line for predicting price (in Singapore dollars) from the weight of the diamond (in carats) is11
Price = 259.63 + 3721.02 (carats)
Required:
(I) What does the slope of this line say about the relationship between price and number of carats?
(II) What is the predicted price when number of carats =0? How would you interpret this price?
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