uniform california earthquake rupture forecast B u s i n e s s F i n a n c e

Competency
Determine the linear correlation and regression equation between two variables to make predictions for the dependent variable.

Student Success Criteria
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Scenario
According to the U.S. Geological Survey (USGS), the probability of a magnitude 6.7 or greater earthquake in the Greater Bay Area is 63%, about 2 out of 3, in the next 30 years. In April 2008, scientists and engineers released a new earthquake forecast for the State of California called the Uniform California Earthquake Rupture Forecast (UCERF). As a junior analyst at the USGS, you are tasked to determine whether there is sufficient evidence to support the claim of a linear correlation between the magnitudes and depths from the earthquakes. Your deliverables will be a PowerPoint presentation you will create summarizing your findings and an excel document to show your work. Concepts Being Studied

Correlation and regression
Creating scatterplots
Constructing and interpreting a Hypothesis Test for Correlation using r as the test statistic
You are given a spreadsheet that contains the following information:

Magnitude measured on the Richter scale
Depth in km
Spreadsheet Using the spreadsheet, you will answer the problems below in a PowerPoint presentation.

What to Submit
The PowerPoint presentation should answer and explain the following questions based on the spreadsheet provided above.

Slide 2: Introduce your scenario and data set including the variables provided.
Slide 3: Construct a scatterplot of the two variables provided in the spreadsheet. Include a description of what you see in the scatterplot.
Slide 4: Find the value of the linear correlation coefficient r and the critical value of r using α = 0.05. Include an explanation on how you found those values.
Slide 5: Determine whether there is sufficient evidence to support the claim of a linear correlation between the magnitudes and the depths from the earthquakes. Explain.
Slide 6: Find the regression equation. Let the predictor (x ) variable be the magnitude. Identify the slope and the y-intercept within your regression equation.
Slide 7: Is the equation a good model? Explain. What would be the best predicted depth of an earthquake with a magnitude of 2.0? Include the correct units.
Slide 8: Conclude by recapping your ideas by summarizing the information presented in context of the scenario.
Along with your PowerPoint presentation, you should include your Excel document which shows all calculations.

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