Now run the simple linear regression for the variables square root of rating and percent of salary from incentive payments.
Obtain the residuals and assess whether the assumptions for the linear regression analysis are reasonable. Include all plots and numerical summaries that you used to make this assessment.
Construct a 95% confidence interval for the square root increase in rating given a 1% increase in the percent of salary from incentive payments.
Consider the values 0%, 20%, 40%, 60%, and 80% salary from incentives. Compute the predicted rating for this model and for the one in Exercise 10.19. For the model in this exercise, you need to square the predicted value to get back to the original units.
Plot the predicted values versus the percents, and connect those values from the same model. For which regions of percent do the predicted values from the two models vary the most?
Based on your comparison of the regression models (both predicted values and residuals), which model do you prefer? Explain.