Waterbury Insurance Company wants to study the relationship between the amount of fire damage and the distance between the burning house and the nearest fire station. This information will be used in setting rates for insurance coverage. For a sample of 30 claims for the last year, the director of the actuarial department determined the distance from the fire station (x) and the amount of fire damage, in thousands of dollars (y). The MegaStat output is reported below.
ANOVA table
Source SS df MS F
Regression 1,864.5782 1 1,864.5782 38.83
Residual 1,344.4934 28 48.0176
Total 3,209.0716 29
Regression output
Variables Coefficients Std. Error t(df=28)
Intercept 12.3601 3.2915 3.755
Distance–X 4.7956 0.7696 6.231
a-1. Write out the regression equation. (Round your answers to 3 decimal places.)
Y = 12.360 + 4.796X.
a-2. Is there a direct or indirect relationship between the distance from the fire station and the amount of fire damage?
The relationship between distance and damage is: ____
b. How much damage would you estimate for a fire 5 miles from the nearest fire station? (Round your answer to the nearest dollar amount.)
Estimated damage: $ _____
c-1. Determine and interpret the coefficient of determination. (Round your answer to 3 decimal places.)
Coefficient of determination:_____
d-1. Determine the correlation coefficient. (Round your answer to 3 decimal places.)
Correlation coefficient: .7622
e-1. State the decision rule for .01 significance level: H0 : ρ = 0; H1 : ρ ≠ 0. (Negative value should be indicated by a minus sign. Round your answers to 3 decimal places.)
Reject H0 if t < ___ or t >____
e-2. Compute the value of the test statistic. (Round your answer to 2 decimal places.)
Value of the test statistic:_____
This is due in the next hour.
Quick Reply
