Consider the following to answer the question(s) below:
To determine whether the cash bonuses paid by Johnson Financial Group are related to annual pay, data were gathered for 10 account executives who received such bonuses in 2007. The data, scatterplot and summary statistics are shown below.

-The residual for the estimated cash bonus of an executive at Johnson Financial earning $82, 613 a year would be
A) $0
B) -$4,981
C) -$15,819
D) -$4,958
E) $15,819

Question

Consider the following to answer the question(s) below:
To determine whether the cash bonuses paid by Johnson Financial Group are related to annual pay, data were gathered for 10 account executives who received such bonuses in 2007. The data, scatterplot and summary statistics are shown below.
  
-The residual for the estimated cash bonus of an executive at Johnson Financial earning $82, 613 a year would be
A) $0 
B) -$4,981 
C) -$15,819 
D) -$4,958 
E) $15,819

Quizplus · Accepted Answer

The residual is the difference between the actual value and the predicted value. The predicted value is $82,613, and the actual value is $77,632. Therefore, the residual is $77,632 - $82,613 = -$4,981.

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