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Question 30 of 31
Q.

You are given the following information about advertising expenditure and sales:

Advertisement expenditure (₹ in lakhs) XSales (₹ in lakhs) Y
Arithmetic mean1090
Standard deviation312
Correlation coefficient between X and Y is 0.8.
a. Obtain the two regression equations.
b. What will be the likely sales when the advertising budget is ₹15 lakhs?
Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2020Subjective· 4mImportance★★★★★
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byx=0.8⋅123=3.2b_{yx} = 0.8\cdot\frac{12}{3} = 3.2 and bxy=0.8⋅312=0.2b_{xy} = 0.8\cdot\frac{3}{12} = 0.2; lines Y=3.2X+58Y = 3.2X + 58 and X=0.2Y−8X = 0.2Y - 8; at X=15X = 15, Y=106Y = 106 lakhs.

Given Xˉ=10\bar{X} = 10, Yˉ=90\bar{Y} = 90, σx=3\sigma_x = 3, σy=12\sigma_y = 12, r=0.8r = 0.8.

Regression coefficients:

byx=rσyσx=0.8×123=3.2,bxy=rσxσy=0.8×312=0.2.b_{yx} = r\frac{\sigma_y}{\sigma_x} = 0.8 \times \frac{12}{3} = 3.2, \qquad b_{xy} = r\frac{\sigma_x}{\sigma_y} = 0.8 \times \frac{3}{12} = 0.2.

Line of Y on X: Y−Yˉ=byx(X−Xˉ)Y - \bar{Y} = b_{yx}(X - \bar{X}):

Y−90=3.2(X−10)  ⇒  Y=3.2X−32+90  ⇒  Y=3.2X+58.Y - 90 = 3.2(X - 10) \;\Rightarrow\; Y = 3.2X - 32 + 90 \;\Rightarrow\; Y = 3.2X + 58.

Line of X on Y: X−Xˉ=bxy(Y−Yˉ)X - \bar{X} = b_{xy}(Y - \bar{Y}): …

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