Question

A business analyst was interested in the relationship between sales and profit
global trading companies. She collected data (in millions of euros) from 50 at random
selected trading companies and did a regression analysis. The statistics program provided
printing below. Assume that the conditions for regression analysis are met.
Mean Std Dev
Profit 20,839 796,977
Sales 4178.29 7011.63
R-Squared = 66.2% s = 466.2
Variable Coefficient SE (Coeff)
Constant -176.644 61.16
Sales 0.0925 0.0075
(a) Is the relationship between sales and profits statistically significant? Try one ¨
give an appropriate hypothesis and state your conclusion in this context. (2p)
(b) Calculate a 95% confidence interval for the average profit of trading companies with a sales of EUR 5000 million. (1.5p)
(c) In the above print, the value is 0.0925. Formulate an interpretation of this
value. (0.5p)

Answer 1