Question

The value of a sports franchise is directly related to the amount of revenue that a franchise can generate. The file BBValues represents the value in 2014 (in $ millions) and the annual revenue (in $ millions) for the 30 Major League Baseball franchises. (Data extracted from www. forbes. com/ mlb valuations/ list.) Suppose you want to develop a simple linear regression model to predict franchise value based on annual revenue generated.
a. Construct a scatter plot.
b. Use the least squares method to determine the regression coefficients b0 and b1.
c. Interpret the meaning of b0 and b1 in this problem.
d. Predict the mean value of a baseball franchise that generates $ 250 million of annual revenue.
e. What would you tell a group considering an investment in a major league baseball team about the relationship between revenue and the value of a team?


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  • CreatedJuly 16, 2015
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