Math Problem Statement

The following table of values gives a company's annual profits in millions of dollars. Reindex the data so that the year 2006 corresponds to x = 0. Find the cubic regression model for the data. Which of these is the coefficient of the x^2 term of the cubic regression model?

Solution

The image presents a problem where a cubic regression model is sought for a company's annual profits, measured in millions of dollars, over several years. The table provides profits from 2006 to 2010, with profits and years listed as follows:

  • Years (relabelled as xx starting from 0 for 2006):
    x=0 (2006), 1 (2007), 2 (2008), 3 (2009), 4 (2010)x = 0 \ (2006), \ 1 \ (2007), \ 2 \ (2008), \ 3 \ (2009), \ 4 \ (2010)

  • Profits (in millions of dollars):
    P=87.6, 85.4, 83.1, 81.5, 80.3P = 87.6, \ 85.4, \ 83.1, \ 81.5, \ 80.3

The goal is to find the cubic regression model and determine the coefficient of the x2x^2 term in the model. The available options are:

  • A) 0.15-0.15
  • B) 0.2320-0.2320
  • C) 0.2697-0.2697
  • D) 0.40-0.40
  • E) None of the above

I will now fit a cubic regression model to this data and calculate the coefficient for the x2x^2 term. Let's proceed.The coefficient of the x2x^2 term in the cubic regression model is approximately 0.0571-0.0571. Since none of the provided options match this value, the correct answer is:

E) None of the above.

Would you like more details or have any questions? Here are five related questions you might want to explore:

  1. How is a cubic regression model calculated from data points?
  2. Can we use other types of regression (e.g., linear, quadratic) for this data set?
  3. How do you interpret the coefficients of a cubic regression model in real-world scenarios?
  4. What is the role of higher-order terms (like x3x^3, x2x^2) in a polynomial model?
  5. How would the predictions change if we extended the model to predict future profits?

Tip: Always ensure your model fits the trend in the data before trusting its predictions—using a polynomial of too high a degree can lead to overfitting.

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Math Problem Analysis

Mathematical Concepts

Cubic Regression
Polynomial Regression
Data Analysis

Formulas

Cubic regression model formula: P(x) = ax^3 + bx^2 + cx + d

Theorems

Least Squares Method for Polynomial Fitting

Suitable Grade Level

Grades 10-12