An analyst at a credit card bank is looking at the relationship between customer

Question

An analyst at a credit card bank is looking at the relationship between customers' charges to the bank's card in two successive months. He selects 20 random customers, regresses charges in March (S) on charges in February ($), and finds an R2 of 96%. He concludes that the model is a useful one for predicting one month's charges from the other. Examine the accompanying data and comment on his conclusions. Click the icon to view the data. Select the correct choice below and fill in any answer boxes to complete your choice. OA. The analyst's conclusion is correct. O B There are two o ers that decrease R2 Without those two points, R2 increases from 96% to %. The analyst should set aside those two customers and use the new model (Round to the nearest integer as needed.) C. There are two outliers hat inflate R2 Without those two points, R2 drops rom 96% to 9 The analyst should set aside those two customers and refit the model. (Round to the nearest integer as needed.) The analysts conclusion is only somewhat correct. The linear model can be used, but only to predict D. arch charges using February charges.

Explanation / Answer

Since R^2 is 96% which is very close to 1, so above analysis is correct.It will he very helpful for prediction

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