A Local Tire Dealer Wants to Predict the Number of Tires

Essay

A local tire dealer wants to predict the number of tires sold each month.He believes that the number of tires sold is a linear function of the amount of money invested in advertising.He randomly selects 6 months of data consisting of monthly tire sales (in thousands of tires)and monthly advertising expenditures (in thousands of dollars).The simple linear regression equation is ŷ = 3 + 1x,and the sample correlation coefficient (r²)= .6364.Test to determine if there is a significant correlation between the monthly tire sales and monthly advertising expenditures.Use H₀: ρ = 0 vs.H_A: ρ ≠ 0 at α = .05.