An Automobile Dealer Wants to See If There Is a Relationship

Essay

An automobile dealer wants to see if there is a relationship between monthly sales and the interest rate. A random sample of 4 months was taken. The results of the sample are presented below. The estimated least squares regression equation is
= 75.061 - 6.254X
$\hat { Y }$ Y X
Monthly Sales Interest Rate In Percent)
22 9.2
20 7.6
10 10.4
45 5.3
a. Obtain a measure of how well the estimated regression line fits the data.
b. You want to test to see if there is a significant relationship between the interest rate and monthly sales at the 1% level of significance. State the null and alternative hypotheses.
c. At 99% confidence, test the hypotheses.
d. Construct a 99% confidence interval for the average monthly sales for all months with a 10% interest rate.
e. Construct a 99% confidence interval for the monthly sales of one month with a 10% interest rate.