i. Trying to predict weekly sales with a standard error of estimate of $1,955, we would conclude that 68 percent of the predictions would not be off more than $1,955, 95 percent would not be off by more $3,910, and 99.7 percent would not be off by more than $5,865. ii. Approximately 68% of the values lie within one standard error of the regression line.
iii. For a set of observations, there is no difference in the width of a confidence interval and the width of a predictor interval.
A) (i), (ii), and (iii) are all correct statements.
B) (i) and (ii) are correct statements but not (iii).
C) (i) and (iii) are correct statements but not (ii).
D) (ii) and (iii) are correct statements but not (i).
E) (i), (ii), and (iii) are all false statements.

Question

Quizplus · Accepted Answer

Statement (i) and (ii) are both correct. However, statement (iii) is incorrect because there is a difference between a confidence interval and a prediction interval. A confidence interval is used to estimate the true value of the population parameter, while a prediction interval is used to estimate the values for individual observations. A confidence interval is typically narrower than a prediction interval because it is based on the average of multiple observations, while a prediction interval accounts for individual variation.

I Trying to Predict Weekly Sales with a Standard Error