An Ardent Fan of Television Game Shows Has Observed That

question 131

Essay

An ardent fan of television game shows has observed that, in general, the more educated the contestant, the less money he or she wins. To test her belief, she gathers data about the last eight winners of her favourite game show. She records their winnings in dollars and their years of education. The results are as follows. $$\begin{array} { | c | c | c | } \hline \text { Contestant } & \begin{array} { c } \text { Years of } \\\text { education }\end{array} & \text { Winnings } \\\hline 1 & 11 & 750 \\\hline 2 & 15 & 400 \\\hline 3 & 12 & 600 \\\hline 4 & 16 & 350 \\\hline 5 & 11 & 800 \\\hline 6 & 16 & 300 \\\hline 7 & 13 & 650 \\\hline 8 & 14 & 400 \\\hline\end{array}$$ Use the predicted and actual values of y to calculate the residuals.

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Definitions:

Securities Exchange Act

A U.S. federal law that regulates the trading of securities such as stocks and bonds in the secondary market, ensuring transparency and fairness.

Misstatement

An error or inaccuracy in stating facts or details, often found in financial accounts or reports.

GAAS

Generally Accepted Auditing Standards; guidelines that auditors follow when conducting audits on companies' financial statements.

GAAP

Stands for Generally Accepted Accounting Principles, a set of accounting standards and practices used in the United States to ensure consistency and transparency in financial reporting.