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2. An insurance company is interested in determining whether life insurance coverage is influenced linearly by disposable inc
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1. Yes, Life insurance coverage is influenced linearly by the Disposable Income.

1020 30 40 50 60 70 800

Plotting the scatter plot with x axis -> Disposable income and y axis -> Life Insurance coverage.

We find the linear trend, i.e. with increasing disposable income, the life insurance coverage increase.

______________

If y is the amount in life insurance coverage and x is the disposable income, with the existing data through linear regression, we find.

y = 2.0392x - 37.288

which means, for every one unit (thousand $) increase in disposable income, the life insurance coverage increase by 2.0392 units (thousand $).

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