Answer:
i) 35
ii) 0.95
iii) employees’ annual earnings are strongly related to their tenure
iv) Employee earnings increase with tenure.
Explanation:
i) The regression line for this data set has a slope close to m = 35
To find the slope of the regression line we need to find two points that lie on the line or that are very close to the line.
We have the following two points;
(1, 175) and (2.5, 225)
slope = (change in y) / (change in x)
= (225-175)/(2.5-1) = 33.33
This is close to 35.
ii) The correlation coefficient is close to 0.95
The coefficient of correlation is a measure of the degree of association between two variables. Correlation coefficient gives information on the strength and direction of a linear association.
The scatter-plot reveals that the annual earnings and tenures of the employees of Stan & Earl Corp are strongly positively associated hence the correlation coefficient is close to 0.95.
iii) Based on this information, we can conclude that employees’ annual earnings are strongly related to their tenure.
The correlation coefficient was found to be close to 0.95. A value greater than 0.7 shows a strong degree of association between two variables. Therefore, employees’ annual earnings are strongly related to their tenure
iv) Employee earnings increase with tenure.
The slope of the regression line of the data set was found to be close to 35. A positive slope implies that the response variable increases with increase in the explanatory variable.
Nevertheless, the correlation coefficient was also found to be positive which suggests a positive association between employee earnings and tenure.