A newspaper published base pay and cash bonus for CEOs of a

A newspaper published base pay and cash bonus for C.E.O.s of a sample of large companies in 2006. A regression was performed to explore the relationship between the two variables.

The regression equation is
Bonus = 418 + 2.85 Pay

Coef

SE Coef

T

P

418

4197

-2.14

0.064

2.854

3.254

0.88

0.406

____ 35. The slope of the regression line for the relationship between all executives\' pay and bonus is

a. 2.85

b. unknown, but almost surely positive

c. unknown, and it could easily be zero or negative

Effects of Fear and Anger on Perceived Risks of Terrorism, published in Psychological Science in March of 2003, reported on a survey taken two months after 9/11. The survey asked 973 Americans to estimate the probability that within the next year they themselves would experience certain unfortunate events; they were also asked to estimate the probability that the average American would experience these events. The events and probabilities are shown in this table, with regression output following.

0.10

0.50

0.10

0.45

0.20

0.50

0.50

0.60

0.50

0.50

0.10

0.40

0.25

0.50

Pearson correlation of Self and Average American = 0.723
The regression equation is
Average American = 0.432 + 0.244 Self

Coef

SE Coef

T

P

0.43196

0.03130

13.80

0.000

0.2436

0.1041

XXXXX

0.066

____ 36. What response value does the best-fitting line predict for an explanatory value of zero?

a. the intercept +0.432

b. the slope +0.244

Predictor	Coef	SE Coef	T	P
Constant	418	4197	-2.14	0.064
Pay	2.854	3.254	0.88	0.406

Solution

35.

The regression equation is
Bonus = 418 + 2.85 Pay

So slope of the regression line is the coefficient of explanatory variable pay. So slope is 2.85. Hence, option a is correct.

--------------------

36.

The regression equation is
Average American = 0.432 + 0.244 Self

Here explanatory variable is Self. Putting self=0 in the above equation gives

Average American = 0.432 + 0.244*0=0.432

This is known as intercept.

Hence, option (a) is correct.