Reference no: EM131685961

Question: Refer to Exercise. The following table, which gives the ages (in years) and prices (in hundreds of dollars) of eight cars of a specific model, is reproduced from that exercise.

a. Calculate the standard deviation of errors.

b. Compute the coefficient of determination and give a brief interpretation of it.

Exercise: An auto manufacturing company wanted to investigate how the price of one of its car models depreciates with age. The research department at the company took a sample of eight cars of this model and collected the following information on the ages (in years) and prices (in hundreds of dollars) of these cars.

a. Construct a scatter diagram for these data. Does the scatter diagram exhibit a linear relationship between ages and prices of cars?

b. Find the regression line with price as a dependent variable and age as an independent variable.

c. Give a brief interpretation of the values of a and b calculated in part b.

d. Plot the regression line on the scatter diagram of part a and show the errors by drawing vertical lines between scatter points and the regression line.

e. Predict the price of a 7-year-old car of this model.

f. Estimate the price of an 18-year-old car of this model. Comment on this finding.