CA Foundation · Quantitative Aptitude · Correlation and Regression
The regression equation of y on x for a firm's data is y = 12 + 0.5x. What is the estimated value of y when x = 30?
The estimated y is 27. Putting x = 30 into the line y = 12 + 0.5x gives 12 plus 15, which equals 27. The slope multiplies x, and the constant 12 must still be added to that product.
- A27Correct
- B15
- C42
- D36
Explanation
Substitute x = 30 into y = 12 + 0.5x: y = 12 + 0.5 × 30 = 12 + 15 = 27. The value 15 comes from dropping the intercept. The value 42 comes from adding 12 and 30 without applying the slope.
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