A Financier Whose Specialty Is Investing in Movie Productions Has

Essay

A financier whose specialty is investing in movie productions has observed that, in general, movies with 'big-name' stars seem to generate more revenue than those movies whose stars are less well known. To examine his belief, he records the gross revenue and the payment (in $ million) given to the two highest-paid performers in the movie for 10 recently released movies. $$\begin{array} { | c | c | c | } \hline \text { Movie } & \begin{array} { c } \text { Cost of two highest- } \\\text { paid performers } ( \$ \mathrm {~m} )\end{array} & \begin{array} { c } \text { Gross revenue } \\( \$ \mathrm {~m} )\end{array} \\\hline 1 & 5.3 & 48 \\\hline 2 & 7.2 & 65 \\\hline 3 & 1.3 & 18 \\\hline 4 & 1.8 & 20 \\\hline 5 & 3.5 & 31 \\\hline 6 & 2.6 & 26 \\\hline 7 & 8.0 & 73 \\\hline 8 & 2.4 & 23 \\\hline 9 & 4.5 & 39 \\\hline 10 & 6.7 & 58 \\\hline\end{array}$$ a. Determine the least squares regression line.
b. Interpret the value of the slope of the regression line.
c. Determine the standard error of estimate, and describe what this statistic tells you about the regression line.