Question

The following table shows the number of cars sold last month by six dealers at Centreville Nissan dealership and their number of years of sales experience.

Years of Experience	Sales
1	7
2	9
2	9
4	8
5	14
8	14

Management would like to use simple regression analysis to estimate monthly car sales using the number of years of sales experience. The standard error of the estimate is equal to ________.

Multiple Choice

• 2.60

• 5.00

• 2.84

• 1.84

Answer 1

Solution: The data given in the question statement is as below. Computing additional columns Years of Experience 1x 7.5 8.5 8.5 10.5 11.5 14.5 0.25 0.25 0.25 6.25 6.25 0.25 2.6673.167 1.667 1.6671.167 0.333 2.167 1.3333.833 4.333 8.444 1.944 1.944 0.722 2.778 2.778 1.167 4 14 1.778 16.611 14 8 3.833 18.778 y, x = 22 Zy-61 13.50 33.333 33.333 Σχ 22 72 Ly 61 3.667 10.167 у Slope of regression line: Σ(x-X)(y-y) 33.333 22 21.0 33.333 Σ(x-i)2 У _ btX bo 10.167 _ (1.0x 3.667) 6.50

SSE = Σ(y-97 = 13.50 SSE 13.50 n-2 6- 3.375 s= MSE =13.375 = 1.84 Hence, standard error of the estimate 1.84