SCENARIO 17-5
You Worked as an Intern at We Always

Short Answer

SCENARIO 17-5
You worked as an intern at We Always Win Car Insurance Company last summer. You notice that
individual car insurance premiums depend very much on the age of the individual, the number of
traffic tickets received by the individual, and the population density of the city in which the individual
lives. You performed a regression analysis in EXCEL and obtained the following information: $\begin{array}{l}\begin{array}{lr}\hline {\text { Regression Statistics }} \\\hline \text { Multiple R } & 0.63 \\\text { R Square } & 0.40 \\\text { Adjusted R Square } & 0.23 \\\text { Standard Error } & 50.00 \\\text { Observations } & 15.00 \\\hline\end{array}\\\\\text { ANOVA }\\\begin{array}{lrcccr}\hline & d f &{\text { SS }} & \text { MS } & \text { F }&{\text { Significance } F} \\\hline \text { Regression } & 3 & & 5994.24 & 2.40 & 0.12 \\\text { Residual } & 11 & 27496.82 & & & \\\text { Total } & & 45479.54 & & & \\\hline\end{array}\\\\\begin{array}{lrrrrrr}\hline & \text { Coefficients } & \begin{array}{c}\text { Standard } \\\text { Error }\end{array} & \text { t Stat } & \text { P-value } & \text { Lower 99.0\% } & \text { Upper 99.0\% } \\\hline \text { Intercept } & 123.80 & 48.71 & 2.54 & 0.03 & -27.47 & 275.07 \\\text { AGE } & -0.82 & 0.87 & -0.95 & 0.36 & -3.51 & 1.87 \\\text { TICKETS } & 21.25 & 10.66 & 1.99 & 0.07 & -11.86 & 54.37 \\\text { DENSITY } & -3.14 & 6.46 & -0.49 & 0.64 & -23.19 & 16.91 \\\hline\end{array}\end{array}$
AGE -0.82 0.87 -0.95 0.36 -3.51 1.87
TICKETS 21.25 10.66 1.99 0.07 -11.86 54.37
DENSITY -3.14 6.46 -0.49 0.64 -23.19 16.91
-Referring to Scenario 17-5, the proportion of the total variability in insurance premiums that
can be explained by AGE, TICKETS, and DENSITY is _________.