10 Jan Xr04-69 All Canadians have government-fundedhealth
Xr04-69 All Canadians have government-fundedhealth insurance, which pays for any medical carethey require. However, when traveling out of thecountry, Canadians usually acquire supplementaryhealth insurance to cover the difference between thecosts incurred for emergency treatment and what thegovernment program pays. In the United States, thiscost differential can be prohibitive. Until recently,private insurance companies (such as BlueCrossBlueShield) charged everyone the same weekly rate,regardless of age. However, because of rising costsand the realization that older people frequently incurgreater medical emergency expenses, insurers had tochange their premium plans. They decided to offerrates that depend on the age of the customer. Tohelp determine the new rates, one insurance companygathered data concerning the age and meandaily medical expenses of a random sample of 1,348Canadians during the previous 12-month period.a. Calculate the coefficient of determination.b. What does the statistic calculated in part (a) tellyou?c. Determine the least squares line.d. Interpret the coefficients.e. What rate plan would you suggest?4.70 Xr04-70 A real estate developer of single-familydwellings across the country is in the process ofdeveloping plans for the next several years. An analystfor the company believes that interest rates arelikely to increase but remain at low levels. To helpmake decisions about the number of homes to build,the developer acquired the monthly bank prime rateand the number of new single-family homes soldmonthly (thousands) from 1963 to 2012.Calculate the coefficient of determination. Explainwhat this statistic tells you about the relationshipbetween the prime bank rate and the number ofsingle-family homes sold.Source: Federal Reserve Statistics and U.S. Census Bureau.
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