Stat 533 Course Project – Part C Essay

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STAT 533 COURSE PROJECT – PART C Using MINITAB perform the regression and correlation analysis for the data on CREDIT BALANCE (Y) and SIZE (X) by answering the following. 1. Generate a scatterplot for CREDIT BALANCE vs. SIZE, including the graph of the ‘best fit’ line. Interpret. From the scatter plot it is evident that the slope of the ‘best fit’ line is positive, which indicates that Credit Balance varies directly with Size. As Size increases, Credit Balance increases and vice versa. MINITAB OUTPUT: Regression Analysis: Credit Balance ($) versus Size The regression equation is Credit Balance ($) = 2582 + 404 Size Predictor Coef SE Coef T P Constant 2581.9 195.3 13.22 0.000 Size 404.13 51.00 7.92 0.000 S = 620.793 R-Sq = 56.7% R-Sq (adj) = 55.8% Analysis of Variance Source DF SS MS F P Regression 1 24200717 24200717 62.80 0.000 Residual Error 48 18498431 385384 Total 49 42699149 Predicted Values for New Observations New Obs Fit SE Fit 95% CI 95% PI 1 4602.6 119.2 (4363.0, 4842.2) (3331.6, 5873.6) Values of Predictors for New Observations New Obs Size 1 5.00 2. Determine the equation of the ‘best fit’ line, which describes the relationship between CREDIT BALANCE and SIZE. The equation of the ‘best fit’ line or the regression equation is Credit Balance ($) = 2582 + 404 Size 3. Determine the coefficient of correlation. Interpret. The coefficient of correlation is given as r = 0.752843. The positive sign of the correlation coefficient indicates a positive or direct

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