A Local Tire Dealer Wants to Predict the Number of Tires

question 122

Essay

A local tire dealer wants to predict the number of tires sold each month.He believes that the number of tires sold is a linear function of the amount of money invested in advertising.He randomly selects 6 months of data consisting of tire sales (in thousands of tires)and advertising expenditures (in thousands of dollars).Based on the data set with 6 observations,the simple linear regression equation of the least squares line is ŷ = 3 + 1x.

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Definitions:

Intent to Convert

The expressed or implied intention of a holder of a convertible security or instrument to change it into a different form, usually into shares of stock.

Pension Funds

Investment pools that collect and invest contributions from participants to finance retirement benefits.

Mutual Funds

Investment funds that pool money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities.

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental.