Personal wealth tends to increase with age as older individuals have had more opportunities to earn and invest than younger individuals. The following data were obtained from a random sample of eight individuals and records their total wealth (Y) and their current age (X). a. State the estimated regression line and interpret the slope coefficient.
b. What is the estimated total personal wealth when a person is 50 years old? (1
mark)
c. What is the value of the coefficient of determination? Interpret it. (1.5 marks)
d. Test whether there is a significant relationship between wealth and age at the 10%
significance level. Perform the test using the following six steps. Step 1. Statement of the hypotheses
Step 2. Standardised test statistic
Step 3. Level of significance
Step 4. Decision Rule
(1 mark) (0.5 mark) (0.5 mark) (1.5 marks)
Step 5. Calculation of test statistic (1.5 marks) Step 6. Conclusion (1 mark)