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.The dealer believes that the number of tires sold is a linear function of the amount of money invested in advertising.The dealer 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 $\hat { y }$
= 3 + 1x and 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:r = 0 vs.H_A:r ¹ 0 at a = .05.
Failed to reject H₀,and there is no significant correlation.