For Exercises 23–37, follow these steps. You have already calculated the regression equation in Exercises 37–51 in Section 4.2. Do the following.

  1. Calculate the sum of squares error, SSE.
  2. Compute and interpret the standard error of the estimate, .
  3. Calculate the total sum of squares, SST.
  4. Find the sum of squares regression, SSR.
  5. Calculate and interpret the coefficient of determination, .
  6. Use to calculate and interpret the correlation coefficient, .

Question 4.226

25. Darts and the Dow Jones. See Exercise 39 in Section 4.2.

4.3.25

(a) 2046 (b) 18.4665. The typical difference between the predicted value of the change in the stocks in the portfolio of stocks selected by the darts and the actual observed value of the change in the stocks in the portfolio of stocks selected by the darts is 18.4665. (c) 3659 (d) 1613 (e) 0.4408. Therefore, 44.08% of the variability in the change in the stocks in the portfolio of stocks selected by the darts is accounted for by the linear relationship between the change in the stocks in the portfolio of stocks selected by the darts and the change in the stocks in the DJIA. (f) 0.6639. This value of is positive. We would therefore say that the change in the stocks in the portfolio of stocks selected by the darts and the change in the stocks in the DJIA are positively correlated. As the change in the stocks in the DJIA increases, the change in the stocks in the portfolio of stocks selected by the darts also tends to increase.