You are given the following information Calculate the least

You are given the following information:

Calculate the least squares line intercept between the price of gasoline and the price of oil. Use the price of oil as the independent variable. Calculate your answer to two decimal places.

Solution

Price of oil is the independent variable (X).

Thus, calculate the slope b=cov(x,y)/var(x)

=(-12)/18=-0.67

Now, the linear regression equation is: Y bar=a+bx bar

Thus, slope=a=Y bar-bX bar

=1431-(-0.67)*432

=1720.44