Question: Susan Smith, a risk manager, is forecasting future losses for a manufacturing company. She calculates a linear trend that represents the company's losses for the
Susan Smith, a risk manager, is forecasting future losses for a manufacturing company. She calculates a linear trend that represents the company's losses for the past four years. The dependent variable (annual number of losses) is charted on the vertical (y) axis; the independent variable (years) is charted on the horizontal (x) axis. When computing the calculation for the linear trend, Susan finds that the value for "b" (the y-intercept) is four and the value for "m" (the slope) is .80. Product output for the company has been increasing by 10% each year, and this yearly increase is expected to continue. Susan has been asked to forecast losses for 10 years into the future. In addition, management advises that several safety features have been put in place on the assembly line and that they, therefore, expect losses to decrease over time. Which one of the following best expresses the results of the linear trend? Available answer options Select only one option A The number of losses will increase by .8 each year. B The number of losses will decrease by .8 each year. C The number of losses will increase by four each year. D The number of losses will
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