SIMPLE LINEAR REGRESSION ANALYSIS

The Ordinary Least Squares Method

1. Prior to being hired, the five salespersons for a computer store were given a standard sales

aptitude test. For each individual, the score achieved on the aptitude test and the number of

computer systems sold during the first 3 months of their employment are shown here. Assume

X represents score on aptitude test and Y represents units sold in 3 months.

X Y

80 25

70 15

45 10

90 40

20 5

a. Draw a Scatter Diagram

b. Derive the equation for the least-squares regression line which will best fit the data

c. Does the sign of the slope coefficient make economic sense? Interpret its meaning.

d. Determine Point Estimation

e. Determine the Standard Error

f. Determine the coefficient of correlation, coefficient of determination, and Adjusted r2.

What do these coefficients tell you?

g. Do hypothesis testing using = 0.05

Please complete every single step from A to G. Thanks.