Question

The following table contains ACT scores and GPA (grade point average) scores for 8 college students. (The ACT is an SAT-type test, popular at Midwestern schools.
Instead of ranging from 200 – 800, the ACT ranges from 20 – 30.) Grade point average is based on a 4-point scale and has been rounded to one digit after the decimal.
Student GPA ACT
1 2.8 21
2 3.4 24
3 3.0 26
4 3.5 27
5 3.6 29
6 3.0 25
7 2.7 25
8 3.7 30
i) Estimate the relationship between GPA and ACT using OLS; that is, obtain the intercept and the slope estimates for the model
GPAi = α + β(ACTi) + μi
Comment on the direction of the relationship. Does the intercept have a useful interpretation here? Explain. How much higher is the GPA predicted to be if the ACT score increases by 5 points?
ii) Compute the fitted values and the residuals for each observation and verify that the residuals sum to zero.
iii) What is the predicted value of GPA when ACT = 20?

Answer 1

Answer:

Kindly check explanation

Step-by-step explanation:

Given the data:

ACT (X) :

21

24

26

27

29

25

25

30

GPA (Y) :

2.8

3.4

3.0

3.5

3.6

3.0

2.7

3.7

Relationship between GPA and ACT using a linear regression calculator :

ŷ = 0.1022X + 0.56813

Slope = 0.1022

Intercept = 0.56813

The relationship between GPA and ACT is in the positive direction, this can be inferred from the slope value which is positive

The intercept value ; 0.56813 means with a GPA score of 0 ; predicted ACT score will be 0.56813

Explain. How much higher is the GPA predicted to be if the ACT score increases by 5 points?

If ACT score increases by 5 ; predicted GPA will be:

Increase = 0.1022(5)

ACT score will increases by 0.511

ii) Compute the fitted values and the residuals for each observation and verify that the residuals sum to zero.

y = 0.1022(21) + 0.56813 = 2.71433

y = 0.1022(24) + 0.56813 = 3.02093

y = 0.1022(26) + 0.56813 = 3.22533

y = 0.1022(27) + 0.56813 = 3.32753

y = 0.1022(29) + 0.56813 = 3.53193

y = 0.1022(25) + 0.56813 = 3.12313

y = 0.1022(25) + 0.56813 = 3.12313

y = 0.1022(30) + 0.56813 = 3.63413

Residual:

2.8 - 2.71433 = 0.08567

3.4 - 3.02093 = 0.37907

3.0 - 3.22533 = −0.22533

3.5 - 3.32753 = 0.17247

3.6 - 3.53193 = 0.06807

3.0 - 3.12313 = −0.12313

2.7 -3.12313 = −0.42313

3.7 - 3.63413 = 0.06587

0.08567+0.37907−0.22533+0.17247+0.06807−0.12313−0.42313+0.06587 = −0.00044 = 0.00

iii) What is the predicted value of GPA when ACT = 20?

ŷ = 0.1022(20) + 0.56813

= 2.61