Industry automobile sales should be related to consumer sentiment. The following table provides a regression analysis in

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Industry automobile sales should be related to consumer sentiment. The following table provides a regression analysis in which sales of automobiles and light trucks (in millions of vehicles) are estimated as a function of a consumer sentiment index.
Regression Statistics
Multiple R......................0.80113
R-squared.......................0.64181
Standard error..................0.81325
Observations....................120
Standard Error t-Statistic p-Value Coefficients Intercept Slope coefficient 0.58432 6.071 10.389 0.00636 14.541 0.09251

For the independent variable and dependent variable, the means, standard deviations, and variances are as follows:

Automobile Sales Sentiment Index (Millions of Units) х 91.0983 Mean Standard deviation 14.4981 11.7178 1.35312 137.3068

A. Find the expected sales and a 95 percent prediction interval for sales if the sentiment index has a value of 90.
B. Find the expected sales and a 95 percent prediction interval for sales if the sentiment index has a value of 100.

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Quantitative Investment Analysis

ISBN: 978-1119104223

3rd edition

Authors: Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto, David E. Runkle

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